Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
The Fed's Two Inflation Problem That Markets Are Missing
Lucas and Luna break down why the Federal Reserve is stuck between two different inflation stories—sticky core services versus cooling goods—and how that split explains the bond market's recent rally despite hot CPI data. They walk through the April PCE print released today, the divergence between the ten-year yield and breakeven rates, and what Chicago Fed President Goolsbee's comments about persistent energy inflation really mean for the rate path. Plus: why the labor market's gradual softening might actually be the thing that lets the Fed cut without restarting inflation. A…
The skinny
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