Macro Hive
In his latest Bloomberg TV interview, Bilal Hafeez gives his take on OpenAI’s impressive "Astro" model upgrade, why the Fed will likely stay on hold at its next meeting, the very real possibility of US 10-year yields hitting 5%, widening French fiscal risks, and more!
Macro Hive
Antonio and Dominique discuss the strong US jobs report, noting that while the economy remains at full employment, slowing wage growth suggests the labour market is not driving inflationary pressures. They look ahead to CPI and upcoming PCE revisions, arguing that the Cleveland Fed’s trimmed-mean and median CPI measures provide a better read on underlying inflation than standard core measures. While Governor Waller has made his support for a hold conditional on CPI, they see the bar as favouring a hold and expect the Fed to remain on hold this month.
Macro Hive
Ben and Dominique evaluate the policy implications of the latest PCE inflation print and Fed Chair Warsh's surprisingly hawkish speech at Jackson Hole. They analyse the divergence between PCE and CPI disinflation, highlighting how portfolio management fee computations and index-weighting differences make for slower PCE than CPI disinflation. While Warsh’s assessment of the economy and financial conditions hint at a potential rate hike, they identify Fed Governor Waller’s upcoming speech as the critical catalyst that could seal a September decision.
Macro Hive
Ben and Dominique explore the incremental shifts toward greater disinflation optimism in the Fed minutes and the skepticism surrounding the Treasury's limited options for fiscal consolidation. They analyse the minimal impact of Treasury Secretary Bessant's doubled bond buybacks against a persistent 6% budget deficit, noting that lower yields will require genuine fiscal discipline rather than market messaging. While core PCE is expected to print at a consensus 22 basis points, focus shifts to Jackson Hole, where Chair Warsh is anticipated to maintain his strict 'no guidance' policy while outlining a long-term vision for Fed modernisation. Dominique notes that flat consumer spending is unlikely to alarm the Fed as long as Okun's law remains stable and the data points at a stable unemployment rate.
Macro Hive
Dominique and Ben review a busy week of economic data, exploring the specific supply shocks driving core goods and the implications of a major miss in retail sales. They analyse the relationship between slowing consumer income and labour supply, suggesting the Fed will maintain its focus on the unemployment rate rather than volatile, "noisy" consumption prints. While recent disinflation supports the doves for September, focus shifts to the upcoming FOMC minutes and reports that Chair Walsh may reduce the frequency of policy meetings to distance the Fed from "spurious" forward guidance. Dominique notes that the current data adjudicates in favour of the doves for the near term but maintains that hawks still see a need for a "risk management" hike to prevent a repeat of 2022.
Macro Hive
In his latest Bloomberg TV interview, Bilal Hafeez gives his take on the ongoing AI revolution, why Japanese yields are mispriced, the persistence of the carry trade, a potential grind higher for EUR/USD, and more!
Macro Hive
Ben and Dominique explore the “brittle” state of the US labour market, which Dominique describes as a “low-hire, low-fire” economy currently balancing on a precarious edge. They analyse how declining participation among older workers and contracting real wages are tempering inflationary pressures, providing justification for the Federal Reserve to remain on hold. As they look toward next week’s CPI and retail sales data, focus shifts to whether a string of low inflation prints could sway "swing voters" or hawkish FOMC members like Kashkari and Hammock. Dominique notes that weakening consumption and real income may eventually highlight deep-seated economic fragilities, and she currently places a 60% probability on the Fed staying on hold for the remainder of the year.
Macro Hive
Ben and Dominique explore the growing “risk management” divide within the FOMC, contrasting hawks who fear a high-inflation regime with doves who believe policy is restrictive enough to wait for more data. They analyse the impact of AI on inflation—with Dominique arguing it acts as a cost-side supply shock rather than a demand driver—and suggest that rising real incomes are finally providing a sustainable foundation for US consumption. As focus shifts to upcoming labour market churn and the critique of "Wash’s" lack of a macro framework in recent communications, the discussion highlights the challenges of the Fed's "no forward guidance" strategy. Dominique aligns herself with the Fed's dovish wing, maintaining that low wage bargaining power relative to productivity will support continued disinflation, though she acknowledges "insurance hikes" remain possible if progress stalls.
Macro Hive
Ben and Dominique explore the likelihood of a protracted conflict with Iran, noting that cognitive biases and domestic political pressures suggest a multi-year duration. They evaluate the budgetary costs of war, suggesting a limited campaign remains manageable while a full-scale invasion remains unlikely due to rising unpopularity among voters. Regarding the Federal Reserve, Dominique expects Chair Walsh to remain on hold in July, avoiding forward guidance while monitoring $100-per-barrel oil prices and the wide gap between wage growth and productivity. While markets price in a September hike, Dominique argues the decision will be strictly data-driven, though potentially complicated by the approaching midterms. Finally, they analyse the shift toward more legally durable tariffs under Section 301, concluding that while China remains a focus for excess capacity, the high political cost of aggressive tariffs will likely limit their implementation as the US economy seeks a "goldilocks" landing.
Macro Hive
Ben and Dominique analyse the recent broad CPI miss, suggesting it reflects a "payback" for previous overstatements of inflation rather than a persistent trend. They examine how cooling labour costs and a soft labour market support continued disinflation, even as the economy digests recent supply shocks. The conversation shifts to Governor Walsh’s evolving views on AI-driven productivity and his potential to spearhead structural reforms to the Fed’s "inefficient" balance sheet and reserve framework. While Dominique expects the Fed to remain on hold for the rest of the year, she assigns a one-third probability to a rate hike while noting that only a systemic shock, such as a bursting AI bubble, would likely trigger a cut.
Macro Hive
Dominique and Antonio examine the Federal Reserve's likely trajectory under Chair Walsh, with Dominique forecasting that the Fed will remain on hold for the remainder of the year. They analyse slowing wage growth, improving trade balances, and falling energy prices as evidence against economic overheating, despite a hawkish faction within the FOMC that recently pushed for a rate hike. The discussion highlights Walsh’s shift away from Powell-era consensus-building toward a “good family fights” model, which empowers individual members and potentially tilts the Fed's reaction function toward more hawkish outcomes. As focus turns to the upcoming CPI report and Walsh’s semi-annual testimony to Congress, Dominique suggests that if his "hold" forecast is wrong, the new institutional structure makes a surprise hike more probable than a cut.
Macro Hive
In his latest Bloomberg TV interview, Bilal Hafeez gives his take on the chip cycle "consensus correction," European tech outperformance, why the dollar's rally is range-bound, the potential for a German manufacturing revival, and more!
Macro Hive
Viresh and Dominique analyse the decoupling of headline and core inflation, noting that household budgets are being squeezed even as passthrough from energy to the broad price index remains limited. They examine how a recovery in labour supply, linked to changes in immigration enforcement, is driving job gains while maintaining wage disinflation. As the Fed prepares to hold rates steady, the discussion centres on new Chair Walsh’s potential reforms to central bank communications and his challenge in reconciling divergent hawkish and dovish views within the FOMC. Dominique points to slowing rental inflation and a cooling in super core services as evidence of continued disinflation, suggesting that while the Fed may adopt a neutral bias, the next Fed move remains a data-dependent risk for the fourth quarter.
Macro Hive
Andrew and Dominique evaluate the recent Non-Farm Payrolls surprise and why the market may be overreacting by pricing in a year-end rate hike. They examine how a rebound in labour supply—potentially linked to a shift away from aggressive immigration enforcement—is creating a "Goldilocks" scenario of strong employment expansion paired with slowing wage growth. With the Fed entering a blackout period, attention shifts to upcoming CPI data and the likelihood that policymakers will signal a move toward a neutral bias. Dominique maintains that the market is overlooking a contraction in real wages and expects weakening consumption to eventually validate her dovish outlook.
Macro Hive
Ben and Dominique explore the growing fragility of the US consumer as falling real incomes and record-low savings rates threaten to stall the nation's primary growth engine. They analyse the "skewed" nature of consumption driven by high-income households and how cooling core PCE data has assuaged immediate FOMC concerns regarding service-sector inflation. While upcoming labour data may signal a "Goldilocks" environment, focus shifts to underlying signs of economic weakness, such as rising unemployment duration, and Fed Vice Chair Jefferson’s more dovish stance on energy-driven income shocks. Dominique notes that a supply-side boost from relaxed immigration is currently tempering wage growth and maintains a forecast for a single insurance rate cut later this year.
Macro Hive
Ben and Dominique explore the market’s hawkish over-interpretation of recent Fed minutes and the potential for global supply chain disruptions to impact underlying inflation. They analyse the sustainability of US consumer spending, arguing that a record-low savings rate will eventually force a growth slowdown and limit business pricing power. As the focus shifts to Walsh’s swearing-in and a potential "hawkish Wednesday" of speakers, the duo highlights the upcoming Summary of Economic Projections as the key indicator for future policy shifts. Dominique maintains that current Q2 growth forecasts are likely inflated and continues to predict one insurance rate cut by year-end as fiscal policy remains restrictive.
Macro Hive
In his latest Al Jazeera interview, Bilal Hafeez gives his take on whether the Iran war could trigger the next debt shock.
Macro Hive
Dominique and Antonio explore the nuances of recent US inflation data and the leadership transition at the Federal Reserve under new Chair Warsh. They analyse how robust retail sales are being sustained by record-low household savings and evaluate the long-term geopolitical tensions underlying the "performative" summit between Trump and Xi. While next week is expected to be data-light, focus shifts to Walsh’s relationship-building efforts to preserve the Fed's easing bias and his potential inaugural public address. Dominique notes that core inflation may be on the cusp of a slowdown despite headline pressures and anticipates contrasting economic perspectives from Fed speakers Waller and Paulson.
Macro Hive
Ben and Dominique examine the "Goldilocks" labour market, where strong employment growth and subdued wages are currently supported by an influx of non-US-born labour. They analyse the friction between this short-term resilience and the long-term risk of a recession triggered by energy shocks and supply chain disruptions if the Strait of Hormuz remains closed. As the Federal Reserve prepares for incoming Chair Walsh, the focus shifts to internal debates over removing the "easing bias" from policy statements and the increasing importance of "trimmed mean" inflation metrics. Dominique notes that upcoming retail sales may signal a contraction in real terms and highlights how recent tariff policies are negatively impacting corporate cash flows.
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