Eurodollar University This Is What Happens Before Every MAJOR Rate Cut
Jul 11, 2025
Recent payroll data and FOMC minutes hint at a possible July rate cut. Despite seemingly positive job numbers, there are concerning signs such as falling hourly earnings and reduced work hours. This chapter explores the mixed signals in the labor market and their implications for Federal Reserve actions. It also critiques traditional inflation theories, suggesting a low inflation risk, while analyzing how the swap market might forecast future interest rates. Will policymakers avoid repeating past mistakes? Tune in for the insights!
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Labor Data Hides Economic Weakness
- Payroll headline numbers mask true labor market weakness seen in falling hours and declining hourly earnings.
- These labor data weaknesses are rare and highly significant economic warning signs.
Unemployment Rate Masks Labor Issues
- The unemployment rate improvement masks a large labor force dropout, indicating hidden employment struggles.
- Adjusted unemployment figures suggest the labor market is weaker than official rates show.
Consumer Spending Declines Sharply
- Consumer spending has declined for five consecutive months, revealing real economic weakness.
- This spending drop is rare and mirrors declines seen only once in the 2010s.