Interest Rates, Yield Curve, The Banks, Outies & Conspiracies

There is good news on inflation in store for Americans. The Labor Department is expected to report that overall inflation fell to about 3% in June, the lowest in two years. Excluding volatile food and energy prices, core consumer price inflation is expected to drop to around 5%, an 18-month low, from 5.3%. Economists think core inflation could ebb further in coming months, to between 3.5% and 4%, depending on the price index. The bad news: Getting inflation down further from there, to the Federal Reserve’s 2% target, will prove difficult if the economy keeps chugging along. That could force the Fed to keep monetary policy tight until the labor market weakens.

In this episode of The Higher Standard, Chris and Saied examine this news and determine the effect it will have on the economy as a whole.

They discuss a Labor Department report indicating that nonfarm payrolls increased 209,000 in June and the unemployment rate was 3.6%. That compared with the Dow Jones consensus estimates for growth of 240,000 and a jobless level of 3.6%.

Chris and Saied look at comments from JPMorgan Chase CEO Jamie Dimon, following the winning bid for First Republic, a lender to rich coastal families that had $229 billion in assets, who claimed that "This part of the crisis is over."

They also offer some thoughts on Fitch analyst Chris Wolfe's assertion that half the country’s banks will likely be swallowed by competitors in the next decade.

Join Chris and Saied for this fascinating and informative conversation.

Enjoy!

What You’ll Learn in this Show:

• Why the printing of trillions of dollars by the Fed in 2020-2022 led to a spike in inflation.
• Why over 40 million Americans will have to restart their student loan payments in the coming months.
• Why the inverted yield curve is such an important topic. 
• And so much more...

Resources:

"Treasury yields fall as investors look to key economic data" (CNBC)

"America’s Biggest Banks Are Going to Need More Capital" (The Wall Street Journal)

"Everyone Wants Interest on Their Deposits. That’s Bad for Main Street Banks" (The Wall Street Journal)

"Last Mile of the Inflation Fight Will Be the Hardest" (The Wall Street Journal)

"Payrolls rose by 209,000 in June, less than expected, as jobs growth wobbles" (CNBC)

"Job openings fall by half a million" (CNBC)

"The American banking landscape is on the cusp of a seismic shift. Expect more pain to come." (CNBC)