Wednesday, May 7, 2025

Hard Data versus Soft Data and Fed's Policy Dilemma

Recession Warnings Are Everywhere, Except in the Data
https://www.nytimes.com/2025/05/07/business/economy-tariffs-recession-indicators-fed.html
Mainstream measures have been slow to detect the impact of tariffs and uncertainty, leaving economists to scour earnings calls and private-sector data sources. 

Why the Fed May Wait Until July to Cut Interest Rates
https://www.morningstar.com/economy/why-fed-may-wait-until-july-cut-interest-rates
Powell says the Fed needs ‘greater clarity’ on how tariffs will affect growth and inflation.

As Fed Holds Rates Steady, Powell Says Next Step Is ‘Not at All Clear’
https://www.nytimes.com/2025/05/07/business/federal-reserve-may-meeting.html
The central bank stuck to a wait-and-see approach as officials brace for President Trump’s tariffs to stoke higher inflation and slower growth.

Why the Fed Isn’t Ready to Join Other Central Banks in Cutting Rates
https://www.wsj.com/economy/central-banking/jerome-powell-fed-economy-d6eda04b
The U.S. faces risks of higher inflation and unemployment. Countries without tax hikes on imports are focused on the hit to growth.