Colby Smith

A Month Without Data Muddles the Economic Picture

The shutdown may not leave lasting economic damage, but it's making the Fed's job harder

Powell warned the data blackout might be a reason for officials to move cautiously with cuts, upending expectations about December

www.nytimes.com/2025/10/30/b... @bencasselman.bsky.social @nytimes.com

Fed cuts rates by 25bps. Two officials dissent: Miran in favor of a 50bp cut and Schmid in favor of standing pat.

The Fed will end QT on December 1

The labor market is in focus as the Fed prepares to cut rates for a second-meeting in a row today despite inflation picking back up. But the shutdown has made it hard to know how significantly it is weakening www.nytimes.com/2025/10/28/b... @nytimes.com

The Fed's strategy to cut rates in support of the labor market even as inflation rose was always considered risky. The shutdown has made it all the more treacherous, obscuring officials’ view of the economy as divisions have sharpened

www.nytimes.com/2025/10/28/b... @nytimes.com

Strains in Short-Term Markets Raise Urgency of Fed’s Balance Sheet Debate

When the Fed meets this week, its officials will be discussing more than just the outlook for rates. Strains in funding markets have raised the urgency around their debate about QT

"Alerts are going off on a very regular basis right now"

www.nytimes.com/2025/10/27/b... @nytimes.com

Fed Prepares Bank-Friendly Changes to Annual Stress Tests

The Fed is making its stress tests more transparent following a lawsuit from the country's biggest banks. The proposal has broad support, but Barr (fmr VC for supervision) says it will make the financial system less safe

www.nytimes.com/2025/10/24/b... @stacycowley.bsky.social @nytimes.com

The BLS may not be able to release the next CPI report, which is due in November, because of the shutdown, according to a White House official. That would leave the Fed without a good read on how inflation is evolving ahead of its final meeting of the year in December @tonyromm.bsky.social

The relatively benign CPI report keeps the Fed on track to lower interest rates next week

"Core" prices rose less than expected, with the annual rate edging lower to 3%

New w/ @bencasselman.bsky.social: Wealthy Americans, buoyed by a booming stock market, are spending freely. Lower-income households, stung by inflation and a slowing labor market, are pulling back

www.nytimes.com/2025/10/19/b... @nytimes.com

Wealthy Americans Are Spending. People With Less Are Struggling.

Via @bencasselman.bsky.social and @colbylsmith.bsky.social and NYT Business:

www.nytimes.com/2025/10/19/b...

Treasury Secretary Stakes Credibility and Taxpayer Money on Argentina Bet

"'You generally don’t want your first use of the E.S.F. to be a failure,' [Brad] Setser said, referring to the Exchange Stabilization Fund. 'I do think it would impact the broader credibility of Secretary Bessent’s financial management.'"

Treasury Secretary Stakes Credibility and Taxpayer Money on Argentina Bet

Treasury Secretary Scott Bessent’s multibillion-dollar bailout of Argentina, a serial defaulter, raises the specter of losses for U.S. taxpayers

"There is always a new crop of investors and traders who think they know better"

www.nytimes.com/2025/10/17/u...

W/ Alan Rappeport @nytimes.com

Is the Fed Too Confident About Inflation? Some Economists Think So.

Powell says the Fed faces no risk-free path, but he seems willing to take a gamble on inflation. As such, the Fed is poised to keep cutting. But some economists warn there is a real risk inflation gets stuck above 2% if officials do not tread carefully www.nytimes.com/2025/10/15/b... @nytimes.com

"We'll start to miss that data," says Powell about the lapse in government statistics because of the shutdown. It will become "more challenging" the longer the shutdown lasts, especially if it means new data is not being collected

Powell's speech centers mostly on the balance sheet, which has become a key point of criticism from Bessent. But he also makes several points on the outlook, signaling the Fed is on track to keep cutting given downside risks to the labor market www.nytimes.com/2025/10/14/b... @nytimes.com

He plans to stay in his role until mandated to retire in 2028

Actually reaching 2% inflation is important for the Fed's independence and credibility, he said. Amid attacks from the president, Williams said he was just focused on doing his job. "We're not political creatures."

Asked about the 2% target given that inflation has run above that level for 5 yrs and is moving away from it given tariffs, Williams said: "We’re not losing track of that." He just wants to make sure they are trying to "minimize the risk of the labor market cooling more sharply"

Rates are still "modestly restrictive" and he sees the Fed on a "journey back to neutral." He sees no second round effects from tariffs and more downside risk to the labor market than upside risk to inflation

Williams did not seem deterred by the lapse in official government statistics (which he thinks are the "gold standard") and pointed to a number of alternative measures that he would monitor, like Conference Board surveys, the NYFed's SCE and private sector sources

If the economy evolves as expected — inflation moving up to around 3% and the unemployment rate inching up beyond its current 4.3% — he would back "lower rates this year, but we’ll have to see exactly what that means."

Williams appears chiefly worried about cracks that have formed in the labor market and wants to make sure that those do not deepen

"The risks of a further slowdown in the labor market is something I’m very focused on"

New York Fed President Backs Interest Rate Cuts to Protect Labor Market

In an interview with @nytimes.com, John Williams of @newyorkfed.bsky.social backs further cuts given his concerns about the labor market. We also discussed inflation, the shutdown, why Fed independence is important and more

thread below/gift link to the transcript: www.nytimes.com/2025/10/09/u...

Minutes from the Fed's September meeting underscore the divisions between policymakers about the path forward for policy. A few officials appeared reluctant to cut last month and a majority see upside risk to inflation. Still, most see scope to cut further this year

Miran on Tuesday explained his shift from opposing rate cuts last year to supporting them this year, saying his view of neutral "has basically just gone from one end of the range to the other." He cites immigration restrictions and expectations of changes to the deficit

Fed’s Independence Remains at Risk Despite Temporary Legal Victory

Cook may have notched another win in her legal battle with Trump over his attempt to oust her as a Fed governor, but the threat to independence won't fade anytime soon

"It’s a time to exhale but not breathe easy," says @petercontibrown.bsky.social

www.nytimes.com/2025/10/02/b... @nytimes.com

Another victory for Lisa Cook in her lawsuit against Trump, who is trying to remover her as a Fed governor over allegations of mortgage fraud. The Supreme Court rules she can stay on in her role as the case is being litigated

The Fed was already facing a tough decision about how quickly to lower rates this year. But that judgment call is set to get much harder if the shutdown deprives the central bank of essential data that help it gauge the state of the economy www.nytimes.com/2025/10/01/b... @nytimes.com

Trump Wades Into Bailout Politics in Offering a Lifeline to Argentina

"You’re throwing money at a country that essentially has exhausted its ability to borrow from the IMF," says CFR's Brad Setser of the US lifeline to Argentina, a serial defaulter
www.nytimes.com/2025/09/25/u... @nytimes.com

NYT: “Treasury Secretary Scott Bessent said this week that if New York City needed a federal bailout” under .. Mamdani, .. “Drop dead”.

“.. But Argentina is a different story.”

@colbylsmith.bsky.social
www.nytimes.com/2025/09/25/u...