Why i think Powell might be wrong 3d Powell was substantially...
Gianluca c1 bis@gianlucac1bis
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Aug 29, 2025
~2 min read
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1
Why i think Powell might be wrong 3d
Powell was substantially dovish today
My basic reading of Powell is:
1)Tariff inflation is most likely temporary
2) employment numbers are low (15-20K) so risk is shifting
3) we are going to adjust mon pol accordingly
1/n
Powell was substantially dovish today
My basic reading of Powell is:
1)Tariff inflation is most likely temporary
2) employment numbers are low (15-20K) so risk is shifting
3) we are going to adjust mon pol accordingly
1/n
2
The June SEP pencilled 2 cuts with end of the year core CPI at 3.1%
July Core CPI was 3.1% yoy
what do i make out of today's speach?
i think Powell took a gamble, and he is likely to lose it
again, after 2021
and if so, this is bad
2/n
July Core CPI was 3.1% yoy
what do i make out of today's speach?
i think Powell took a gamble, and he is likely to lose it
again, after 2021
and if so, this is bad
2/n
3
firts of all
Labor Market
As Powell said, there is no slack. Hirings are slowing due to shrinking labor force (unempl rate is at 4.2%). And this is due to immigration policy, nothing to do with rates being restrictive
it is a labor shock from the offer side due to policy
3/n
Labor Market
As Powell said, there is no slack. Hirings are slowing due to shrinking labor force (unempl rate is at 4.2%). And this is due to immigration policy, nothing to do with rates being restrictive
it is a labor shock from the offer side due to policy
3/n
4
CPI
Core Cpi is already at 3.1%. Anyone involved with picking stocks, knows that companies are starting this month to raise prices. Prior to august, companies were offloading non tariffed inventories, which are now rebuilt but tariffed
while finished good inv are ATH
4/n
Core Cpi is already at 3.1%. Anyone involved with picking stocks, knows that companies are starting this month to raise prices. Prior to august, companies were offloading non tariffed inventories, which are now rebuilt but tariffed
while finished good inv are ATH
4/n
5
From PMI one can also see what was reported above: prices are on the rise
5/n
5/n
6
Even price increases are not due to the economy running hot.
They are due to policy: tariffs
SO WHAT IS POWELL SAYING?
That rates will go down to counter the employment trend (due to immigration policy) while prices are rising (due to tariff policy)
6/n
They are due to policy: tariffs
SO WHAT IS POWELL SAYING?
That rates will go down to counter the employment trend (due to immigration policy) while prices are rising (due to tariff policy)
6/n
7
I tell you what
I understand pressure on Powell
But he is giving companies a green light to increase prices, with core CPI at 3.1% in August as opposed to december as companies just started price increases
He completely neglected forward looking Inflation,
like in 2021
7/n
I understand pressure on Powell
But he is giving companies a green light to increase prices, with core CPI at 3.1% in August as opposed to december as companies just started price increases
He completely neglected forward looking Inflation,
like in 2021
7/n
8
He completely neglected forward looking Inflation,
like in 2021
If i was him, i would have choosen to die better
As he is done anyhow
end
8/8
@ThManfredi @Phastidio @INArteCarloDoss @degiorgiod
like in 2021
If i was him, i would have choosen to die better
As he is done anyhow
end
8/8
@ThManfredi @Phastidio @INArteCarloDoss @degiorgiod
