To answer Guy Berger's question, here are some of my slides in the NABE panel "Ensuring the Quality of US Statistics" on March 3, 2025. 1. First, real time NFP surprises drive market moves. We all know that. On average, every 100k surprise = about 5 bps move in 2year.

2. There has been large revisions, both upwards and downwards, in recent years.

3. I ask, is the initial market move justified ex post? The directional change of jobs was off particularly in 2021 (hiring was faster) and 2024 (less hiring in fact). Perhaps in 2021 Fed would have accelerated timetable of policy withdrawal (in real time, NFP disappointed by

The macro backdrop of the framework review -- which Powell will unveil this Friday....is that core PCE inflation has top 2% for 5 years...and assuming FOMC's SEP forecast materializes, will be more than 7 years of >2% inflation by 2028.

Under FAIT, appropriate monetary policy will allow inflation to run "moderately" above 2% for "some time." In the quantitative policy rule for FAIT in the staff white paper, that "some time" for averaging is 32 quarters. Given that core PCE inflation indeed is above 2% for

My full piece Bloomberg Terminal "Jackson Hole Pivot May Not Be the One Markets Want" blinks.bloomberg.com/news/stories/T…

I think Jay Powell was not being dovish today, and this is the sort of speeches that people will realize how hawkish it is with time to digest. And this kind of knee jerk reaction, only to be reversed later, had happened before.

One thing Powell did today —he gave a masterclass of how to straddle between placating political pressure (giving just enough hints of openness to cuts, which can be interpreted both ways) while laying the ground for hawkish response without appearing to do so.

I explain what I hear that made me judge this speech as NOT DOVISH. Bloomberg Terminal blinks.bloomberg.com/news/stories/T…

Our NLP Fedspeak index, which takes into today's headlines by Powell, Hammock, and Collins, ticked in a hawkish direction.

So my takeaway from Powell's speech today is that a September cut is still really down to forecasting the data -- the CPI and the NFP. True, the bias is somewhat in the direction of a cut, but I don't think the sureness in the market pricing accurately reflect the risk. As a

So a non-human read (chatgpt, Grok, our nlp fedspeak model) of Jay Powell speech all conclude it carries hawkish tone.

We know this indeed exists.

On the revisions = turning point narrative...the revisions last year for QCEW is likely larger than this year... I am inclined to think that the point turned last year, not this.

"We find that higher U.S. tariffs reduce the U.S. trade deficit through general equilibrium adjustments, but raise domestic prices and lower real consumption." NEW Discussion Paper by Lorenzo Caliendo, Samuel Kortum, & Fernando Parro: cowles.yale.edu/research/cfdp-…

Today’s JPMorgan Treasury client survey showed one of the biggest weekly shifts (+8%) into outright bond SHORTS over past five years Thu: ADP 😮‍💨 Fri: Payrolls 👀

Whatever tomorrow’s job prints look like, it will likely be quickly revised UP.

Why? Augusts…typically lower initial response rate for all sorts of reasons, ie ppl on vacation. More likely than not historically the next two revisions are up.

This is our preview for the preliminary benchmark estimate for jobs tomorrow. Our estimate is a smaller-than-consensus 560k downward revisions, with a range from 475k to 714k. We see a rebound in QCEW in 1Q 2025, based on bankruptcy and business formation data. Of course all

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