00:00 Speaker A
I’m curious what stood out for to you and sort of the implications then for the Federal Reserve?
00:09 Speaker B
Yeah, Julie, I mean, clearly markets think that a rate cut in September is a slam dunk, but you look at this morning’s report and I’m not sure that’s the case because core CPI, which is what the Fed focuses on, clocked in hotter than expected, 3.1% versus 3%. Remember this excludes the volatile food and energy prices. That was up from 2.9% in June. And what the Fed’s really looking for is the impact of tariffs. And when I looked at this report, you see a little bit of it, right, when you look at furniture, um, maybe shoes, not so much in apparel, which is surprising to me. And so it’s not super perceptible when you look at this report, but services looked sticky to me and services has been a concern for the Fed. It looked like it was coming in line, it was it was looking good. So this report looks a little bit sticky to me. I don’t think it’s enough for the Fed to make a decision at this point. We are going to get more data before the September meeting, but it goes back to what I’ve said previously on our air and I’ll say it again, which is that the Fed is in a bit of a dilemma right now. They’re looking at both the inflation side of their mandate, which looks sticky. They’re looking at the job side of their mandate, which is looking weaker. I think that the determinant factor for the Fed is going to be the September jobs report, the one that we get, or I should say the August jobs report that comes out on September 5th. Because if that is weaker, then I think that could be the trigger for the Fed to cut. But if we see a rebound from what we saw this summer, given that inflation looks sticky right now, I still see a majority of the committee and sort of that wait and see mode.
03:28 Speaker A
Well, and I’m going to I’m going to throw a further wrench into it. What if you see a rebound but a lower revision for July, right? Because so so then do you just assume that that August number is going to be revised lower as well. So just to
04:11 Speaker B
Right, and that also speaks to how the data is collected, right? We know that there’s sort of a three-month course here where the BLS goes out to companies and maybe companies aren’t responding until month three and that’s why we’re seeing such large revisions in the data. And to your point, you know, that’s what we’ve seen consistently all year. So we’ll probably see another revision down.
04:52 Speaker A
Yeah. I mean, could we go negative?
05:00 Speaker B
Right. As as Claudia Sam said, uh, you know, in the in the last half hour, Fed’s job is never easy, right? So, but maybe particularly not right now. Um, Jen, I also want to talk to you about this new nominee for commissioner of the Bureau of Labor Statistics, EJ Antony, who is at the Conservative Heritage Foundation. Economists don’t seem thrilled about this pick and there is this fear amongst economists that there will be sort of the partisan thumb on the scale when it comes to data.
06:07 Speaker C
Well, remember, Julie, like I said, I was watching whether the nominee is someone who is going to change the process of how data is collected and how things are done versus just simply putting somebody new into oversee as we saw with McIntyre prior. And and with this new nominee, Antony, you know, he has been a long time critic of the BLS and how the BLS collects data and he said there are better ways to collect data and process and disseminate it and that is going to be the next job of the BLS commissioner. So now that he is the nominee, you know, we’re going to have to see what he’s going to do. Now, he has to be confirmed by the Senate. So the Senate is going to be peppering him with questions. I’m sure Democrats more than Republicans about what he’s going to do, how he could change the process of data collection. Certainly there are improvements that could be made, but the question is, you know, could this be uh uh slanted in a way that would be partisan to make the numbers look better, which is what investors have been concerned about. And questions over how could he handle a report that perhaps the president doesn’t like.
08:23 Speaker A
Right. Good questions all. Romson, I know you’ve been looking at some of um Antony’s past commentary. Um we were talking about this a little bit in the last hour that he’s been a critic, but it’s not clear how he would fix it, right? Or how he would change it at this point.
09:09 Speaker D
That’s right. I mean, it’s clear he’s a Trump ally. Um, you don’t have to be a genius to work that out. He has called the data from the BLS back in May. He tweeted and said on on X, he wrote, you know, it’s like getting a random num a random number generator. He’s called the CPI data under Biden phony baloney. So he’s clearly um, you know, agrees with President Trump on a lot of things. Um, and that’s what the worry is, that he he the Senate might he might he does need Senate approval and his critics are worried though that he’s not going to be uh neutral enough. And don’t forget, non-farm payroll data is often revised. And in fact, in the run-up to the November 2024 elections, the big revisions, some economists and statisticians would tell you, they hurt Trump’s opponents more than they hurt President Trump. Uh, so he’s, yeah, it’s a it’s a it’s a really tricky one. I he’s definitely going to get grilled by Democrats, but I you know, don’t don’t rule out any Republicans also asking him some tough questions as well. Don’t forget the start, the number of staff he’s going to be in charge of is just 2,000. It’s not a lot. And you know, we’re in a period where, you know, President Trump is trying to to cut jobs in big agencies. So this is going to be a tricky job, whoever took the job, but he’s going to come under increased scrutiny as he’s seen as sort of a a big Trump ally as well.
11:41 Speaker A
Right. And and economists have been calling for more resources at that agency, not less.
