Laura: What’s the Fed’s current stance on interest rates and the economy?
Will: The Fed held rates steady at 4.25–4.50%, basically telling the markets: “We’re good… for now.” Think of it like a nervous parent waiting to see if their kid actually studied for the math test. They swapped “expanding at a solid pace” for “moderated,” which is central banker-speak for “not terrible, but let’s not throw a parade.” Bottom line: the economy’s cooling, and the Fed’s watching like a hawk in bifocals.
Laura: How is the political environment affecting the Fed’s decisions?
Will: The President is loudly calling for rate cuts—kind of like yelling at a thermostat to make the room warmer faster. Ironically, this comes after months of preaching price stability on the campaign trail. But Powell isn’t blinking. He handled questions about politics and job security with the calm of a yoga instructor on chamomile. I’ll be publishing a piece soon about how hard it is to push the Fed around—basically, it’s built like a fortress with a calculator moat.
Laura: What’s the story behind the dissenting votes from Bowman and Waller?
Will: Dissent at the Fed isn’t rare—it’s like that one uncle who always has a different opinion at Thanksgiving. But Waller’s stood out because he’s an FOMC insider, not one of the regional wild cards. Some say he’s positioning himself for a promotion—others say he just really likes saying “no.” Bowman’s dissent? Less surprising—she just got a shiny new title from the President and may be flexing her freshly polished influence.
Laura: What upcoming data should markets be watching?
Will: Two big ones this week:
- PCE (Thursday): The Fed’s favorite inflation thermometer.
- Nonfarm Payrolls (Friday): AKA, “How many people got hired and how worried should we be?”
If either report comes in hotter than expected, the Fed might slam the brakes on rate cuts—and the markets might throw a toddler-style tantrum.
Laura: Why is the Fed being so cautious right now?
Will: Because D.C. just passed the “One Big Beautiful Bill”™️—yes, that’s the unofficial name—and it could juice the economy like a pre-workout smoothie. Add in cooling trade tensions and businesses potentially revving back up, and you’ve got a cocktail that could reignite inflation. The Fed doesn’t want to lower rates just to chase inflation around again like a dog after its own tail.
Laura: What’s coming up before the next Fed meeting in September?
Will: Mark your monetary calendars for August 21–23: it’s the Jackson Hole Symposium—central banking’s answer to Coachella. This year’s theme is: “Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy.” Which is basically economist code for “Why are Boomers retiring, Gen Z freelancing, and robots stealing our jobs?” Expect high-level debates, maybe a few passive-aggressive PowerPoint slides, and at least one viral moment if someone mentions AI in a bold font.