00:00 Speaker A
And Leslie, the change in private payrolls coming in at 38,000, the expectation was 75,000. July was also revised lower. Is that a concern for you at all when we look at the private sector?
00:15 Leslie
Well, I mean, I think that was something that was expected. You know, I wouldn’t say it was a current concern, but listen, job creation is is slowing. There’s no question. You know, we do have this, you know, this low hire, low fire kind of environment, but we did see some increase in layoffs from that Jolts, from the beige book, and that’s really what the market’s going to focus on. I mean, we’ve been really focused on that that layoff um level to see whether or not companies are actually laying off and it has increased slightly, but you know, job creation’s low. There’s no question, but it’s really are they laying off that’s really that’s going to be the big issue going forward in terms of how we view the economy. But I we’ve seen a slight increase in that like I said in both, you know, the the Jolts and the beige book. We and we do agree that the consumer is cooling, we just don’t think they’re collapsing. And we’ve we’ve been here before in terms of the market expectations of pricing in several cuts. And I think the key to September and the FOMC will be, is it a dovish cut or is it a hawkish cut? The the question of a cut is no question, right? They’re going they’re going to cut. But how really he lays a foundation after that. And we have we get a new dot plot and what his language is and we have PPI and CPI next week, right? So, I think the market is getting pretty well ahead of itself in terms of the amount of cuts. So it’s really going to be the language in the September meeting that’s going to dictate how this how the market trades the next several months.
01:31 Speaker A
Yeah, and Steve, I want to bring you back in here because you said before that it does matter the why. Why is the Fed cutting because sometimes you don’t want a cut if the labor market is rapidly deteriorating or the economy is falling apart. Again, not much reaction here for markets. But how do you view where we could be positioned post September?
01:57 Steve
Well, I think again, you you hit on my one of my key points here and that is, you know, the why does really matter because you know, sometimes you have to be careful what you wish for. We’ve had this discussion before. You know, if if if you’re getting a rate cut because things are, you know, going a little slowly and maybe the Fed’s going to give you a little little bit of vitamin here then, you know, a little bit of juice, then that’s okay. If if the economy is so weak that it requires massive rate cuts, be very careful what you wish for. We’re not at the latter condition yet, which is why the market’s mentality is is is good. Today we came into this number again, sort of a heads I win, tails I win because because, you know, we it was weak, it was good enough it was weak enough to keep the Fed on the side of cutting rates, but not weak enough to require real intervention into the economy that will upset the corporate picture. And on a day where you have something like Broadcom up double digits and some other big stocks up, um, you know, that there’s nothing to break that momentum in the number we saw today.
