Help an econ reporter out here: Who is doing all this spending? Clearly most from upper-income consumers, but consumer sentiment surveys are all gloomy, and then we get a big 1.2% jump in retail sales this month! apnews.com/article/reta...

Capital Economics on retail sales:

Warsh likely to side with financial markets over Trump as Fed rate hike expected apnews.com/article/fede...

Today's producer price index shows big price increases in air fares, hospital inpatient care, and outpatient care, which will push up the Federal Reserve's preferred measure of inflation. Could make rate hike more likely. apnews.com/article/prod...

WASHINGTON (AP) — In the real world, President Donald Trump is struggling to stop inflation, rout the Iranian government and restore American manufacturing with tariffs. However, it’s a different story in the fantastical vision that he shares with supporters .... apnews.com/article/trum...

Gotta love that “Sorry!”

Cleveland Fed President Beth Hammack reiterates her support for hiking rates in LinkedIn post, just before blackout period (when Fed officials don't comment for 10 days before a meeting). She dissented last time and still hears from businesses seeking higher rates: www.linkedin.com/posts/beth-h...

As if next week's inflation report wasn't already high stakes enough, Fed's Waller saying his decision whether to support a hike or not will largely depend on it: apnews.com/article/infl...

New York Fed president John C. Williams spoke with CNBC this morning. Watch his interview: nyfed.org/4ylsJmG

Warsh's speech has raised expectations for a rate hike in September, setting the Fed chair up for potential questions about his inflation-fighting commitment if the central bank doesn't hike then. Our takeaways from the Fed's Jackson Hole conference: apnews.com/article/infl...

Warsh raises stakes for Fed's next meeting and other takeaways from Jackson Hole conference

Federal Reserve Chair Kevin Warsh provided his most detailed insights yet on how he views the central bank's fight against inflation in a high-profile speech an at annual economic conference in…

apnews.com

Ahead of Bessent's news conference today: apnews.com/article/iran...

Iran's rial currency hits new record low as US prepares to announce more sanctions

Iran’s currency has hit a record low as Washington prepares to announce new sanctions. The U.S. has said the sanctions would add further pressure on an economy already battered by previous ones and…

apnews.com

It's fascinating to me to see all the praise for Warsh "finally" letting bond markets allegedly price off economic fundamentals, rather than Fed guidance, and yet the administration that appointed him doesn't seem to like those prices.

Our AP explainer on what’s going on in Treasury markets: Why Treasury Secretary Bessent's moves to calm the bond market haven't worked so far apnews.com/article/rate...

Why Treasury Secretary Bessent's moves to calm the bond market haven't worked so far

Interest rates rebounded Thursday despite efforts by Treasury Secretary Scott Bessent to put a lid on longer-term borrowing costs.

apnews.com

This seems overly pessimistic, but revealing about how Americans see inflation eroding their finances, despite mild cooling in price gains (from UMich consumer sentiment survey):

Interesting take from the inflation report: (h/t Bill Adams at Fifth Third Commerical Bank):

The Fed will hold a press conference next week after the Wednesday meeting, even as Warsh has committed to having them after every meeting:

Here's one Wall Street bank's take on whose dots are whose in the latest Fed SEP. Feel like Hammack or Logan could be the top dot, rather than Schmid, but any make sense (from Deutsche Bank):

Gas up 16 cents in past week, diesel up 26 cents, while both are now up slightly from a month ago. Going to reverse the recent disinflation we've seen if it continues.

Cleveland Fed president Beth Hammack out with hawkish statement today on LinkedIn. With Logan, perhaps two dissents at the July meeting in favor of a hike?: tinyurl.com/mpuda5hp

Dallas Fed's Lorie Logan not convinced by June CPI, and makes a forward-looking case for rate hikes: "...one month of relief is not enough. ... Unfortunately, inflation does not appear to be headed sustainably back all the way to 2 percent." www.dallasfed.org/news/speeche...

Remarks on inflation, employment and monetary policy

Dallas Fed President Lorie Logan shares her views on the economy and monetary policy outlook.

dallasfed.org

Federal Reserve research note finds that 90% of AI equipment is sourced from overseas -- specifically East Asia -- and its persistence could worsen inflation through rising import prices: www.federalreserve.gov/econres/note...

Technology Shocks, the AI Boom, and the U.S. Current Account

The Federal Reserve Board of Governors in Washington DC.

federalreserve.gov

Our take on Fed Chair Warsh's hearing today: apnews.com/article/fede...

Warsh, while avoiding forward guidance, is sketching out what Fed-watchers would call a "reaction function": The Fed needs to respond to inflation when it broadens from just a few categories, such as oil and gas, to more generalized price increases: "That's something we can do something about."

Warsh at Senate hearing: Business investment driven by AI has "contributed mightily" to economic growth in the past 12 months. Yet with much (most?) of the chips, computer equipment, etc. coming from overseas, its impact is likely lesser than has been advertised.

Warsh on day two of hearings, before Senate, on recent inflation readings: "Any central banker would be happy to have data going in the right direction." Yet these are "imperfect measures of underlying inflation" and his task force will examine new sources.

I am reliably informed that Powell often did testify for three hours or more, which makes sense, particularly in House given committee's size.

Chris Rugaber@chrisrugaber.bsky.social · 2mo ago

Former Fed chair Jerome Powell sought to keep congressional hearings to two hours. Warsh is well into hour three, in the only example so far of added communication compared to his predecessor and perhaps a sign of deference to Congress.

Former Fed chair Jerome Powell sought to keep congressional hearings to two hours. Warsh is well into hour three, in the only example so far of added communication compared to his predecessor and perhaps a sign of deference to Congress.

New Fed Chair Warsh on AI says he doesn't believe in the "lump of labor fallacy," that there are a fixed number of jobs and new technology will only subtract from them. In congressional hearing, he notes that Internet has created "1.5 million jobs" as Uber and Lyft drivers.

"Just four large tech companies — Google parent Alphabet, Amazon, Meta Platforms, and Microsoft — are expected to invest $720 billion this year, mostly on data centers." apnews.com/article/ai-i... AP News By @chrisrugaber.bsky.social

Massive AI buildout poses latest inflation threat as consumers pay more for laptops and electricity

American consumers — and the Federal Reserve — are being hit with another high-cost headache. The gusher of investment in data centers — likely topping $700 billion this year — to power artificial int...

apnews.com

ok, we found the reason for Anti-World Cup Effect now!!! It's Boston's fault (or Scotland's fault!)

Chris Rugaber@chrisrugaber.bsky.social · 3mo ago

Well, if the bars didn't order enough beer for all the Scottish World Cup fans in Boston, maybe they didn't hire enough workers either. (Jobs report shows loss of 61,000 positions in restaurants, bars, and hotels nationwide last month).