Fed Meeting in October Will Be Tricky, Wilding Says

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00:00Is this a source of comfort for this Federal Reserve next week?

00:05Well, I mean, I don't know. I mean, I think certainly it's good news on the inflationary

00:09pressures. But the argument that we've been making, which I think is symptomatic of this

00:14report, is that the economic adjustment that we're seeing to tariffs is coming through less

00:20on a price adjustment. And instead, companies are finding ways to defend margins by offsetting

00:27other costs. I think the fact that you saw another headline this morning around a large

00:32retailer that is doing some layoffs at the kind of higher executive levels, that's just

00:39in our minds symptomatic of that, that they are finding these other ways to cut costs.

00:44So what that means for the Federal Reserve is that there is some downside risk to the labor

00:49market here. So I don't know that they should be completely taking a sigh of relief here.

00:55We need to see the labor market data, obviously, when the government reopens.

00:59But as you and Mike mentioned, we do think they cut in October. You know, and of course,

01:04the median expectation from the Fed is that they'll cut again in December.

01:08How much of a forward look can they give us at the October meeting, Tiffany? When Chairman

01:12Powell goes into the news conference, he doesn't have much visibility on anything right now.

01:16How much guidance can he offer us for December and beyond?

01:19Yeah, I mean, I think it's incredibly tricky and I'm not sure that they will offer a lot

01:26of guidance. You know, I think they're going to they're going to they're going to say that

01:30we don't have a lot of data to go on here. There's private sources of data. But but even

01:35there, it appears that some of the Fed's, you know, previous sources of private data that

01:39they got in the labor market, maybe they're not getting anymore. So it is a much more tricky

01:42situation for the Fed. You know, they're going to be looking at, you know, markets and, you

01:48know, and I think the news flow in order to kind of figure out what's going on here.

01:53And I think it's going to be really tough for him in terms of guiding any further.