Bloomberg Audio Studios, podcasts, radio news.
Single best idea of post CPI. That's what we do of PPI on Thursday and on the retail sales. Everybody hanging on this, and of course I love what Neil Duddy called the tariff derangement syndrome. And we'll have to see just all the cross currents that are going on. We had a lot of good conversations. Constance Hunter of
EIU got us through the inflation report. Jason Furman out on Twitter from Harvard with his wonderful four annualized statistics one month, three months, six month, twelve month, and on and on. I saw twenty eight different flavors of where we're heading on inflation. I'll let you decide. We started strong with Rebecca Patterson from the Council on Foreign Relations. She talked about regime chain.
I think we're in a new regime for inflation. I think we're in a new regime for bond yields. So if the economy slows a lot, which Constant Constance was talking about right before me, if the economy slows enough, that's going to help pull inflation down. But that's not a situation anyone wants right. Usually you get deflation when you have a deep recession.
We don't want that.
But I think for the Federal Reserve, I was trying to look at when is the last time we got this rate cuts with inflation above target and the job market softening? But okay, okay, nineteen ninety five. So at the time they did three twenty five basis point insurance cuts, inflation was running about two point three, so lower than where we are now. The job market was okay, but the economy broadly was softening, and so they said we're going to try to massage this a little bit, and
the stock market obviously loved it. It was up about fifteen percent over the three cut period the SMP, and I think that's probably what we're going to get this time. I don't know if it's one cut, two three. I lean towards less frankly because of the inflation risk, and I think they'll do a cut in September. It's so priced in it would be very difficult for the Fed to argue against that. But Jackson hole later this month. I believe it's August twenty first, twenty third. That'll give
us some more color. I think on the sidelines of where they're leaning.
Rebecca Patterson just brilliant there on bringing it back to the ninety four ninety five analogy, and it's not the same, but nevertheless the history is important to note. Ira Jersey with us with Bloomberg Intelligence trying to parse out the bond market of bills, notes and bonds. Here's Ira Jersey.
What's interesting is that we're priced now for a September rate cut and a December rate cut. My feeling is is that once the Fed starts to move, they're going to move and keep going. They're not going to skip a meeting just at random. So I think that if they do cut in September, they'll also go in October and then December. Now will they go more than say another you know, four cuts and caught a one hundred basis points or will they cut more than that? Still
an open question. I suspect that ultimately they will cut to below three percent. So you're talking about one hundred and fifty basis points one hundred and seventy five basis points of ray cuts this cycle. Well, keep in mind, Tom, like you know, the way that they're thinking about this. Look inflation right now is two and a half percent FED funds is over four percent, so that means you have a one and a half percent or more than
one and a half percent a real funds rate. So to get the neutral under be kind of there a simplistic view of the world. They should could be able to cut one hundred and seventy five base points and just be at neutral.
That's what we like. Rebecca Patterson to Ira Jersey just just absolutely brilliant analysis. Some differences there. I think Ira looking more aggressively out for raycuts and Rebecca, But at the same time, it's the conversation that we're having, given this moment that we're living in, and we'll go to Jackson Hall here at the end of August all I thought it'd be a snooze fest. Wrong. I'd scheduled climbing to the top of the tetons. That's not going to
happen this time. Will be too busy on your podcast across the nation on Apple, on Spotify, and on YouTube podcasts. It's single best idea