E45: U.S. Economy and the Fed – What’s Next?
KEY TAKEAWAYS
- Recent data reveals a significant U.S. labor market slowdown, with major downward payroll revisions showing job growth is near zero, pointing to weakening economic demand rather than just a shrinking labor supply.
- This shift increases the likelihood of a Federal Reserve rate cut, as concerns about downside employment risks now balance inflation worries, prompting a move toward a more neutral policy stance.
- All eyes are on the September FOMC meeting, where a 25-basis-point cut is anticipated; a weaker jobs report could even prompt a more aggressive 50-basis-point reduction to support the U.S. economy.
Rob Rowe, U.S. Regional Director of Research and Head of Global Strategy and Macro Group, sits down with Chief U.S. Economist Andrew Hollenhorst for a discussion of the U.S. economy and the Fed. They break down how recent payrolls revisions have changed the narrative around the U.S. labor market and look at the effects of tariffs on consumer prices. And what does all this mean for the Fed's path?
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Rob Rowe, US Regional Director of Research and Head of Global Strategy and Macro Group, Citi
Rob Rowe is the Head of Citi Research’s Global Strategy & Macro Group (GSMG) as well as Head of Research for the Americas. GSMG unites all of Citi’s Economists with Fixed Income, FX, Equity and Commodities strategists to create a common team providing research on the world’s major economies and asset classes. Rob has been with Citi for 35 years in various capacities. He originally joined Smith Barney, Harris Upham & Company in 1989 working in investment banking, fixed income sales, and research. In addition to his overall responsibilities, he continues to provide portfolio strategy for select clients as part of his previous role overseeing the Global Bond Portfolio Analysis team.
Andrew Hollenhorst, Chief U.S. Economist, Citi
Andrew Hollenhorst, Chief U.S. Economist, leads Citi Research’s U.S. Economics Team and is responsible for Citi’s views on the U.S. economy and monetary policy. The team endeavors to tie its views on economic fundamentals to outcomes in financial markets. Prior to his current role, he initiated Citi’s coverage of short-term interest rate markets and worked on cross-asset investment strategies.
