Six dissents in September? Danielle DiMartino Booth joins Jeremy Szafron to break down July’s PPI 0.9 percent surprise, tariff-driven services inflation, and whether the Fed could split over rate cuts at the next FOMC. We dig into the PPI–CPI gap (including BLS changes), Scott Bessent’s “neutral 150–175 bps lower” argument, labor revisions pointing to net job loss since 2024, and how to position across bonds, equities, gold, and the dollar now. Danielle also flags one early-warning signal: the MOVE index.
Key topics:
-PPI up 0.9 percent, services up 1.1 percent: tariffs, pass-through, and margin pressure
-PPI versus CPI: methodology shifts, shelter, and why the gap matters
-Bessent’s neutral debate: 150–175 bps lower and the case for or against a 50 bps cut
-Fed dynamics: independence and dissent risk at the September meeting
-Labor reality: continuing claims, delinquencies, and revisions since 2024
-Tariffs: revenue versus growth drag, wholesalers and retail margins, earnings risk
-Positioning: duration calls, sector tilts, defensives versus tech risk
-Gold above 3,300 dollars, miners versus bullion, and a strong-dollar contrarian setup
-One indicator to watch first: the MOVE index and credit stress
Chapters:
00:00 Intro: PPI up 0.9 percent, services up 1.1 percent, tariffs and markets
01:06 PPI versus CPI: methodology, shelter, and margin squeeze risk
03:30 Bessent on neutral and the 50 bps cut debate
05:39 Jobs and revisions: continuing claims, delinquencies, net job loss since 2024
09:09 Data quality and how the Fed decides (BLS changes and revisions)
12:40 Fed dynamics: independence and dissent risk at the September FOMC
14:35 Tariffs: revenue versus drag, wholesalers and retail margins, earnings
15:43 Positioning: bonds and duration, equities and sector tilts, defensives
17:50 Gold and miners: levels, flows, and dollar scenarios
19:23 One early warning: MOVE index to credit to broader risk
21:10 Lightning round and takeaways
Follow Jeremy Szafron on X: https://x.com/JeremySzafron
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Subscribe to Danielle’s research on Substack: https://dimartinobooth.substack.com/
#Fed #RateCuts #Inflation
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