Latest / Markets with Megan: A Quick Financial Markets Update / What's the Price of Ignoring Prices? | S2 E082 | 09-26-25

Transcript

What's the Price of Ignoring Prices? | S2 E082 | 09-26-25 · Markets with Megan: A Quick Financial Markets Update

• 0:01
  MeganHorneman: The equity markets like that inflation report we received this morning.
• 0:04
  MeganHorneman: It's Friday, September the 26th, and this is Markets with Megan.
• 0:08
  MeganHorneman: If you like this podcast, please subscribe.
• 0:10
  MeganHorneman: You can hit that alarm bell.
• 0:12
  MeganHorneman: Also share with friends, family, or colleagues.
• 0:14
  MeganHorneman: But let's break down some of the economic data we got today and let's start with inflation.
• 0:19
  MeganHorneman: First of all, the the Fed's preferred inflation indicator, this is the core PCE.
• 0:25
  MeganHorneman: It rose two-tenths of a percent, and it was revised slightly lower for the month of July, also at 0.2%.
• 0:32
  MeganHorneman: But on a year-over-year basis, there's really no surprise here.
• 0:35
  MeganHorneman: It rose 2.9%.
• 0:37
  MeganHorneman: That was the expectation that economists had been surveyed.
• 0:41
  MeganHorneman: They expected it to rise 2.9%.
• 0:43
  MeganHorneman: So the markets are cheering this.
• 0:45
  MeganHorneman: They're thinking the Fed can still come in and continue to cut rates.
• 0:48
  MeganHorneman: This concerns me a little bit because let's go a little bit deeper into this data.
• 0:53
  MeganHorneman: These numbers are typically rounded.
• 0:55
  MeganHorneman: So when you look at that year-over-year rise at 2.9%, that's a solid 2.9%.
• 1:01
  MeganHorneman: It's been rising on a year-over-year basis now for four consecutive months.
• 1:06
  MeganHorneman: In July, we saw the year-over-year level at 2.85.
• 1:10
  MeganHorneman: So we are seeing solid 2.9 levels.
• 1:14
  MeganHorneman: And as we mentioned, four consecutive months, inflation is not going the way the Fed wants it to go.
• 1:20
  MeganHorneman: This is sticky.
• 1:21
  MeganHorneman: It's going to be much more difficult for them to get to that 2% target.
• 1:24
  MeganHorneman: The markets don't really care.
• 1:26
  MeganHorneman: They're cheering this.
• 1:27
  MeganHorneman: This is where we think maybe there's some complacency coming into these markets here.
• 1:31
  MeganHorneman: We also received the personal income and spending report, and consumers keep spending.
• 1:36
  MeganHorneman: We're looking at personal spending up six tenths in the month of August versus income that was only up four tenths.
• 1:43
  MeganHorneman: So this drove the savings rate lower to 4.6%.
• 1:47
  MeganHorneman: And that's the lowest level we've seen here this year.
• 1:50
  MeganHorneman: So again, the consumers not concerned about this inflation data, but it is being felt.
• 1:56
  MeganHorneman: This is compounding on month after month for consumers.
• 1:59
  MeganHorneman: Eventually, the consumers will uh stall will stall on their spending.
• 2:04
  MeganHorneman: That's all that we have today.
• 2:05
  MeganHorneman: Um, if you want to see a fit history of our podcast, you can go to marketswithmegan.fm.
• 2:09
  MeganHorneman: Thank you.