Fed’s Goolsbee: While In Dark On Official Data I Was More Paranoid About Inflation Side, Since There's Less Data

A no cut December is setting us up for 50 bps to kick off 2026. Labor market is imploding. September numbers experienced unprecedented funny business (highest seasonal adjustment factor ever; 4th worst September in history ahead of only 2018, 2001, 2008 without that adjustment). October ADP Monthly NER looked okay, but in reality, that was measuring week of Oct 12 vs week of Sep 12. October ADP weekly NER, which measured 4 week average ending Oct 25th reported losses. We are sliding up the X axis of the Beveridge curve. Anyone with a working pair of eyes and ears can tell you that the SS "low hire, low fire" left the port back in Q3 and has since been replaced with a plain as day "no hire, some fire", and the firing is accelerating.

Wage growth expectations have plunged, UMich consumer sentiment survey is 2nd worst reading in the entire 73 year history. Tariffs are not, never have been inflationary (even SF Fed acknowledged this and truthfully concedes that they are dis-inflationary, as they depress economic activity across the board). Private credit is imploding, Fed's repo facility is flashing red flags for liquidity, black unemployment is soaring.

Yes cuts will reignite inflation, but that's not the reason for the hawkishness. The real reason for the hawkishness is that Trump wants dovish cuts and half of the fed is afflicted with TDS. I'm surprised Powell hasn't been chugging Tylenol on air as a symbolic act of resistance against Trump's political pressure on the Fed.

Back to the data - we know we're not getting October data at all. November data release date is now pushed back until after the December meeting. They have all the data gap they need to justify no cut in December, only for the data to come out 5 days later and reveal that the economy has begun GFC-era meltdown, opening the door for the Fed's inflation bazooka. When hasn't QE followed the ending of QT?

More cuts aren't good for the long-term stability of USD value, but it's pretty clear that they haven't cared about that for over a century now. They didn't care about USD stability when the fed was founded, they didn't care about it during the first US default under FDR, they didn't care about during the second US default under Nixon, they didn't care about it when they inflated their way out of 2008's bubble-pop, they didn't care about it when they blew up M1 like a cheap sex doll at a frat party during COVID to fund Biden's bribes, and they don't care about it now.

Here's the guy that understands what the fuc' is going on! I can't bother myself to write paragraphs anymore... as only 3% of people here understand it anyway.

97% be like: dude, look at the stock market. BLS says we added 100k jobs bro! Everything's fine yo!

...and other ignorant comments like this.

Anyway, thanks for the post!

As if the only new startups are all Ai ,there are a lot of businesses and startups that need loans and capital and also human ressources for theur endeavor to take off and bare fruits.this is nonsense ,ofc they need to cut

He’s one of the more dovish Fed folks, and even he is saying:

“Inflation is stuck around 3%, the data is noisy, employment is still strong enough – so I don’t want to cut aggressively yet.”

Call it no cut december

what the heck are you smocking? You need to calm down and take each trade one at a time and use a stop loss

How exactly do rate cuts help ai job losses? Lower rates means more risk taking, more ai companies expanding and new ones being created. That will mean more ai applications to replace people. So lower rates could easily accelerate job losses. AI can’t be compared to anytime in history, this isn’t some straightforward industrial revolution or internet, this is the possibility of literally eliminating tens of millions of jobs permanently.

But I’d agree in the short term, the Fed will lower if the data begins to show terrible things, but I’d doubt the bad data will show up that soon. It will take a while for companies to really integrate useful ai.