Tessera

🔥CPI inflation jumped 0.4% and held at a 3.4% gain from a year ago. Core CPI, which exclude food & energy, rose a hotter than expected 0.3%. The gains were heavily in services, a problem for the Fed. The super core services rose a wicked hot 0.5% and were up 3% from a year ago.

9/11: The nightmares returned this year after a long period of calm. A friend and former colleague, John Howell, helped make the memorial below in Charlotte happen. The FF Steven Coakley Foundation put it together. We met years later and discovered he was across the street as I was in the...

Took my inspiration from Irish poet Yeats this month. “The Second Coming” written in 1919. Promise a cute picture of a child eating a donut if you make it to the end. kpmg.com/us/en/articl...

The donut economy

Growth holds, but the center hollows out.

kpmg.com

The producer price index jumped 0.4% in August on higher energy prices, in-line with expectations. That is prior to the recent surge in oil and seems somewhat stale. What is more worrisome is where the price hikes were. They were heavily in diesel and heating fuel.

Diane Swonk @dianeswonk.bsky.social · 4w ago

Houston, we have a problem…shocks are becoming the norm. Repetition builds muscle memory for inflation. We are more than five years into the current bout of inflation. It is hitting prices and demand with exception of data centers & the affluent. Corrosive & destabilizing.

My take on Fed Chair Warsh speech. His disdain for forward guidance was overwhelmed by a need to underscore Fed independence & persistence of inflation. Markets filled in the void in his remarks by ⬆️ September rate hike odds. kpmg.com/us/en/articl...

Warsh speaks, markets infer

No hand-holding.

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Diane Swonk @dianeswonk.bsky.social · 4w ago

Data deluge - Fed on the defensive The Fed’s PCE inflation gage still too hot, with underlying service sector inflation holding at nearly double it 2% target in July. A September rate hike is on the table and rising in probability. We still expect two rate hikes by year-end.

My take on Treasury interventions & the challenge Fed Chairman Warsh face going into privotal week that culminates with Kansas City Fed Jackson Hole Symposium. Https://lnkd.in/p/gAERRtHS

Markets listen to promises; they price proof This week’s bond market rout was not about one data point or one speech. It was about trust and the mounting cost of losing it. The timing is either… | D...

lnkd.in

Humbled to be inducted into the Chicago Innovation Hall of Fame at their 25th Gala. I addressed innovation, what is means personoally & professionally. I hope some of the themes resonate. vimeo.com/1218358118/5...

Diane Swonk - Chicago Innovation Hall of Fame Speech

This is "Diane Swonk - Chicago Innovation Hall of Fame Speech" by TV House on Vimeo, the home for high quality videos and the people who love them.

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Tariffs are starting to ramp back up - inflation effects initially small but complicated by bureaucracy. Most companies who were able to get refunds did not drop prices. The exception was some rollback in mostly grocery prices but starting to see other reports of discounting.

Retail sales drop 0.6%. Still up 5% y/y July, which is more than inflation but weaker than 6.8% y/y in June. Weakness largest in motor vehicles -June was highest selling rate in 9 months. Sales still elevated relative to earlier in the year. Online specials in pulled e-commerce into June vs July.

I am getting a lot of questions about why the Fed Hawks seem so intent & even panicked about inflation & raising rates NOW. The answer is multifaceted but ultimately lands on Fed credibility and the fear of repeating mistakes of the past.

Today’s PPI data, which was unchanged in July, look calmer in the surface than they are for the Fed’s preferred measure of the PCE index. We are still missing import prices to calculate the data but here is what I am getting.

I was honored to be inducted into the Chicago Innovation Foundation Hall of Fame. Here is a copy of my speech - my dad taught me about innovation and being a rebel with a cause. I hope you see hope in it. acrobat.adobe.com/id/urn:aaid:...

My award was given to me by the unstoppable Hedy Ratner, who is a personal inspiration. Thank you to Chicago Innovation and the brilliant minds honored with me and in the last 25 years and for all you do to help lift the wings of kids and make Chicago so special to me.

Atlanta Fed@atlantafed.org · last mo.

Sticky inflation is stuck. ⬇️

The Atlanta Fed's sticky-price consumer price index (CPI)—a weighted basket of items that change price relatively slowly—rose 3.5% (on an annualized basis) in July, following a 0.8% increase in June. On a year-over-year basis, the series is up 2.8%. atlfed.org/3TQmurX

Atlanta Fed Sticky-Price CPI line chart showing CPI up 2.8%.

Inflation in July didn’t cool enough to calm Fed hawks The CPI rose 0.1% in July, and was up 3.4% from a yr ago. The relief could be short-lived given the rebound in oil prices. Brace for more increases in at the gas pump in August. Diesel fuels is way up, which has spillover effects.

A reminder that tariff uncertainty is still with us. Our trade and customs team is getting an influx of calls on whether the section 338 50% tariffs imposed by the administration on about $24 billion in Canadian imports will go into effect as scheduled next week.

Here is a direct link the turbulence Chairman Kevin Warsh faces as he goes into the Kansas City Fed’s Jackson Hole Symposium speech later this month. kpmg.com/us/en/articl...

Prince or prisoner?

Warsh gets the crown, markets get the gavel.

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This month’s take on the tensions building in the outlook and regarding the Fed Chairman’s speech at @kansascityfed.bsky.social Jackson Hole Symposium speech. Stakes are high. lnkd.in/p/gNAzqS4Y

Prince or Prisoner? | Diane Swonk

I have never seen anything like this. Nor has the Fed. Inflation is still too hot, labor markets are cooling beneath the surface, but unemployment is falling. A new Fed chair is stepping into one of ...

lnkd.in

My take on a craxy day for employment www.linkedin.com/posts/dianes...

The July employment report was a gut punch. Hiring stalled, public-sector payrolls fell, and the labor force shrank again. The headline unemployment rate improved, but for the wrong reason: fewer… | D...

linkedin.com

“Mr. Kashkari, who said in his own statement that “to manage against the risk that high inflation could become entrenched, he would “rather tighten policy incrementally" as he gathered more data on the trajectory of the economy.

Cleveland Fed President adds more color to her vote to dissent in another LinkedIn post. She did not find the current policy rate restrictive - meaning it should be higher just to hold inflation constant, let alone bring it down. This is a growing debate and sentiment in the Fed.

My take on GDP, which shows domeatic demand robust, trade deficit wide and inflation still simmering. kpmg.com/us/en/articl...

Consumers & AI drive growth; trade gap widens

Inflation still running hot.

kpmg.com

Less than ideal headline for a new Fed Chairman from CNBC

My take on the three Fed dissents. Inflation is becoming a norm, not an anomaly. That is a problem for the Federal Reserve. Warsh has argued it is a choice - time to choose to derail it. www.linkedin.com/pulse/warshs...

Warsh’s short-lived honeymoon

Three dissents at his second meeting. The Federal Open Market Committee (FOMC) – the policy-setting arm of the Federal Reserve – voted to hold interest rates unchanged in July.

linkedin.com

I talked with Jeremy Hobson and David Brown from The Middle about inflation, inequality and why the concentration of wealth is adding to inflation even as most consumers are struggling. Heart-wrenching trade-offs people making at grocery store, on whether they can keep their pets & medical tests. 💔

Inflation is still too hot, supply shocks are multiplying and the politics around the Fed are getting louder. Kevin Warsh may want to channel Greenspan — shorter statements, fewer clues and less dissent — but this is not the 1990s. Tariffs, war, AI and fiscal stimulus…