Monetary Policy & Inflation | US
The Week Ahead: Warsh’s Midnight Market Test
Macro Hive
Ben and Dominique evaluate the Federal Reserve’s policy outlook, pointing to recent Fed speeches and FOMC minutes that signal the central bank will keep rates on hold in October. They analyse upcoming economic data, highlighting a growing disconnect between headline and core CPI due to limited energy pass-through, explaining why PPI gains will not alter Fed policy, and noting how real wage contraction continues to weigh on retail sales and consumer spending. While the Fed remains cautious about aggressive rate hikes, focus shifts to upcoming Fed commentary for signs that confidence in medium-term growth may be cooling. Dominique notes that moderating optimism around the AI boom and shifting midterm election odds—where prediction markets favour a House flip—could further temper Fed hawkishness.
