The David Lin Report Inflation Reaches 'Inflection Point'; Fed Rate Hikes Could Return In 2026 Warns Economist
Oct 31, 2025
Lauren Saidel-Baker, an economist at ITR Economics, dives into the intricacies of inflation and the Fed's decision-making. She explains the subtle cooling in the labor market despite a reported job surplus. The discussion touches on the ongoing trade tensions with China and how recent layoffs in tech don’t signal a widespread economic downturn. Lauren also highlights the nuances of wage growth and its implications on consumer spending, all while offering insights on future inflation risks and GDP projections.
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Jobs-To-Openings Ratio Masks Weakness
- The jobs-to-openings ratio fell from about 2:1 to roughly 1:1, which masks historical norms.
- Saidel-Baker argues the market looks balanced now but is weaker relative to the 2020–23 tightness.
Labor Market Is Softer, Not Broken
- The labor market hasn't collapsed but shows softer pockets and shifting balance.
- Saidel-Baker emphasizes the jobs-to-seekers ratio moving from very tight toward a more balanced level.
Small Cut Now, Bigger Risk If Cuts Continue
- A 25bp Fed cut is too small alone to reignite runaway inflation.
- But cumulative cuts plus existing liquidity and tariffs could add fuel if cuts continue into 2026.