When Simone Biles, the Greatest Of All Time woman gymnast, lands solidly on her feet after an amazing vault she is said to “stick the landing.”
The Federal Reserve is trying to “stick the landing” of controlling inflation while maintaining strong employment at the same time. This is a tricky dynamic balancing act with many external influences (e.g. fiscal policy from Congress, political action and the occasional pandamic).
The Fed has maintained the fed funds rate at a constant 5.33% since August 2023 as inflation gradually declined.
The Control Panel shows that the bond and options markets predict that the Fed will begin to cut the fed funds rate in September.
https://www.wsj.com/economy/central-banking/fed-near-interest-rate-cut-d303dbd5?mod=hp_lead_pos1
Treasury yields are falling across the entire yield curve, which is partially normalized and almost flat.
The Fear & Greed Index is neutral. The stock market has dropped recently but this is probably noise (the dog days of summer).
Initial unemployment claims have risen slightly over the past 6 months but are still low. Ditto the unemployment rate.
The Atlanta Fed’s initial GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2024 was 2.8 percent on July 26. This is a respectable GDP growth rate that can be maintained indefinitely without overheating the economy.
The METAR for next week is sunny.
Wendy