Fed's Barkin (2027 voter) says demand in the economy is solid, but some sectors are not feeling it
Newsquawk Staff ·
INFLATION
- Says there are cost pressures on businesses.
- Says the set of cost pressures of the past 18 months, starting with tariffs, are broad-based and firms feel they have to pass them along.
- Do not anticipate inflation will accelerate, but also do not see it falling at this point.
- Inflation is the most important risk for the Fed right now.
LABOUR MARKET
- Businesses are still cautious about hiring, but are not yet firing
- Earnings remains strong, and that is encouraging businesses to invest and hold on to staff
ECONOMY
- Demand in the economy is solid, but some sectors are not feeling it.
- Budget deficit is sizeable and fiscal policy over the past few years has been a tailwind for the economy.
- Do not have a point of view what will happen to fiscal policy following the election.
PATH
- Path on policy is straightforward, the issue now is pace, and gradual "makes sense".
- Policy right now is somewhere around neutral.
AI
- AI is a big part of current strong demand.
- Do not think AI is what is currently driving productivity as much as adaptation to the labour shortages that began during the pandemic.
- AI build-out has definitely had an inflationary impact in the near term.
FED
- Change in number of policy setting meetings is not a big deal.
- [MARKET ANALYSIS] Fixed firms as energy slips and some haven allure comes from the Nvidia/NQ tech pressure
- Daily US Equity Opening News - NVDA board considers CEO ouster after fresh affair allegations; Hon Hai Q3 net profit beat; CRWV slides on USD 4bln financing report; CTVA down on guidance cut; PFE & BX agree USD 1.5bln obesity co-funding
- Fed's Daly (2027 voter) says the job report good news, wage growth isn't booming, and real wages are falling
- Fed's Musalem (2028 Voter) says people remain concerned about inflation at the current level; inflation expectations are anchored right now, consistent with 2%
- US White House Economic Director Hassett says there is plenty of room for data centre growth to continue, CNBC interview
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