April jobs number 175k, well below 240k estimates. Markets rally

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reversing a trend of strong job growth

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LOL, the aforementioned job growth has been in low paid part time jobs. Mostly filled by illegals. We’ve been losing full time jobs for a while now.

Finally starting to crack

Rate cuts are back on the menu

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Rate cuts are back on the menu

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What is the effect of rate cuts in the face of raging inflation?

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Rate cuts are back on the menu

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Not quite yet, but it's hopeful.

Summertime usually sees a lot of economic activity, the real tell is going to be how GDP plays out over Q2. If it comes in below Q1's growth, the natural assumption would be that inflation comes back down thus cuts could be up for September (June would be too soon and absent an economic crash, there's no way inflation hits the 2% mark by the June meeting). This becomes more likely if inflation has indeed started moving down by the release of the June numbers (August numbers will be out just before the September meeting, if inflation has fallen throughout the summer, a September cut becomes the safe bet).

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What is the effect of rate cuts in the face of raging inflation?

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Define “raging” inflation?

Im sticking with them looking at PCE saying its been tamed or dropping, umemployment rising over 4% right before Nov for at least a .25 cut for a big rally before the 4th

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Im sticking with them looking at PCE saying its been tamed or dropping, umemployment rising over 4% right before Nov for at least a .25 cut for a big rally before the 4th

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It's a possibility. I think we need Unemployment to hit 5% and with inflation at or below the 2% mark for a couple of months before they should make a cut though. I agree there will likely be a big rally when that happens, my worry is that too much optimism over just a single cut spurs the growth of too much demand and we end up with inflation quickly climbing right back up.

Another side of this is there's a frickton of consumer debt at high interest out there. The time length of prolonged rising unemployment could well pop the consumer credit bubble, causing a domino effect as consumers started filing for bankruptcy en masse. That would make GDP plummet as so much of its growth has been built on debt creation. If anything drags us into a deflationary environment, it would be that sort of scenario and that would be... bad.

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I think we need Unemployment to hit 5% and with inflation at or below the 2% mark for a couple of months before they should make a cut though

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no.

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We are gonna find out especially if the unemployment continues to increase

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Look up stagflation

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Look up stagflation

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We throw this term around far too casually. We’re nowhere near such a phenomenon.

By definition it’s a combination of slowed growth, high unemployment and high inflation.

I’ll admit that growth feels slower despite some numbers being released. Unemployment is still at historic lows. And while our lens to the world tends to be the here and now; from a historical context inflation is not anywhere close to periods of stagflation. The 70’s era UK period that coined the term had years of 25% inflation and interest rates in excess of 15%.

I think many of us have lost sight of the fact that we’ve spent most of our adult lives where interest rates were at unprecedented low levels. Literally free money it seemed.

While the prospect of paying 7-8% on a home loan seems blasphemous to many. Odds are your parents happily refinanced to get that rate 30 years ago.

Not my intent to be argumentative; just find that term is often thrown about in the most sensationalist context.