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The Great Economic Debate!

If you believe the Fed has too much power…are you sure? Would you rather it be one of those two guys?! Biden’s performance was more disastrous than the second half of the Eagles season last year.  

JMO Core PCE Wager Update
Jan              2.94%
Feb              2.93%
March         2.83%
April           2.78%
May            2.57% 

That’s an average of 2.81% so far. I’m feeling pretty good. JMo would need Core PCE to average at least 3.15% the rest of the year to win.  

More importantly, two weeks ago the Fed projected we would finish the year at 2.8%. We were already at 2.8%, and now we’re at 2.57%? 

In his press conference, Powell admitted the estimate was conservative. But if you’ve spent years screaming “data dependent” at us, shouldn’t you be focused on being accurate, not conservative?  

Powell also said base effects could cause the readings to stall out or even climb. “Base effect” is the mathematical outcome of comparing a number today to a rapidly changing number from a year ago. This, too, is a fair point. But when we’re this close to your threshold for cuts, we deserve better. 

Speaking of which…


The Great Economic Debate!

Moderator: Welcome to the Great Economic Debate. I'm your host, Jay Powell. Both camps have agreed to a set of rules that clearly benefit one of the candidates, so we expect a lucid and substantive debate. Thank you for joining us tonight, gentlemen.

Mr. Inflation: (coughs meekly) Thanks Jerome. Happy to still be here and even happier to have that long walk to the podium done.

Mr. Labor: Don’t thank me, Jay. Thank the judge that approved this as part of my work-release program. Then again, I appointed her so maybe you should thank me? Did you know she hadn’t even finished law school when I got her on the federal bench? Like her, every American has me to thank for their job. Even you, Jay. You should thank me. You’re welcome.

Powell: As agreed, let’s start with the easiest question possible. A layup. The type of question there’s no chance you aren’t prepared for. The sort of question you can’t possibly screw up. The sort of question that gives you every opportunity to look energetic and presidential before most Americans tune out. Are you ready? Can I get you anything before we start? You’re sure you’re good? OK, here we go…nice and easy…Mr. Inflation, since you came into office prices are up dramatically. The average American is paying significantly more for everything. What do you say to those voters that feel like they are worse off than they were four years ago?

Mr. Inflation: What are you talking about, man? I just got a dozen jellybeans for a nickel on the Rehoboth boardwalk. When I became president, drive-ins were dying. All the soda shops were boarded up. Unemployment was over 8 billion percent, (clears throat), I mean 8 million percent. Prices are only up 2.57% over the last year. Sure, there’s more work to be done, but I’m the fella to do it. Also, abortion. January 6th. Pornstar. Tax breaks for the rich. Convicted felon. And any other talking points before I forget them.

Mr. Labor: This guy is delusional. I left him with the greatest economy in the history of the world and he screwed it up. GDP was over 100%. The unemployment rate was negative. I created more than 500 bajillion jobs while I was president. All true - look it up.

Powell: Sorry, but fact checking or pushing back on outlandish claims isn’t something we do plan on doing here tonight. Mr. Inflation, do you feel like the inflationary problems we’ve been experiencing are in any way self-inflicted? Did massive spending under your administration throw fuel on the inflationary fire?

Mr. Inflation: He created the most debt of any president ever, ok? He spends money like he’s a Democrat. He left me with a huge deficit by creating a $2T tax cut that only benefitted his trillionaire friends. He paid $150 in taxes, and I should know because my team leaked his tax returns. I’m going to fix his taxes and wipe out his debt. The immigrants are going to be illegal but taxing and I am making childcare for the elderly expensive I mean affordable for the single moms. Healthcare costs are a big contributor to inflation and I’m going to make sure the government is in charge of that because seniors need less money for prescribing every single solitary thing for the Blue Hens against Hamas. Look at what I’ve been able to do with abortion, excuse me, SpaceX…mom, is that you?

Mr. Labor: ………

Powell: ………..

Mr. Inflation: ……..

Mr. Labor: ………

Powell: ……….

Mr. Inflation: Look – we finally beat Medicare.

Mr. Labor: I cancelled his debt.

Mr. Inflation: Nuh uh! Cancelling debt is my thing!

Mr. Labor: You’re a Palestinian! But not the good kind, the weak kind.

Mr. Inflation: You support LIV Golf!

Mr. Labor: I have two course records and have won 9 Hooter’s Long Drive Contests. I am the greatest golfer. The greatest. Ask Tiger. He’s employed because of me.

Powell: Gentlemen!

Mr. Inflation: Is there a chair or something I could use?

Powell: No sir, apologies.

Mr. Inflation: OK, I thought someone mentioned you had a chair or were a chair or something…

Powell: Mr. Labor, you claim to have created the strongest jobs market in history. But some economists believe many of those jobs are going to illegal immigrants, while others point out that most of the gains are going to government and healthcare positions, both of which are the result of massive spending. How do you reconcile the claim of a strong labor market that is totally dependent on more government spending?

Mr. Labor: Melania doesn’t work, so clearly immigrants aren’t responsible for the job gains. I will shut down the border to all but the best-looking immigrants. I’m going to create a Miss Immigration Pageant, and me and a panel of judges will…

Mr. Inflation: Immigration? About time we got around to one of my strong points…

Mr. Labor: I’m not even mad he interrupted me, I wasn’t sure he was still with us. Listen, I invented the vaccine, I built the most magnificent wall, I am the only person in the universe equipped to decide if an immigrant is pretty enough to be allowed into our great nation. Miss Immigration Pageant 2025 – brought to you by every pandering big tech firm.

Powell: But you haven’t addressed the question about the level of which government spending has led to strong job gains.

Mr. Labor: I can think of one person whose job that isn’t safe after I’m president…

Powell: Well sir, as a friendly reminder, you appointed me.

Mr. Labor: No I didn’t. That foreign-born Islamist Obama did. That’s the same fake news that led to people claiming I had high turnover during my last presidency, saying people like Michael Flynn, Reince Priebus, Sean Spicer, Anthony Scaramucci, Steve Bannon, Hope Hicks, John Kelly, Sarah Huckabee Sanders, Mick Mulvaney, Mark Meadows, Stephanie Grisham, Kayleigh McEnany, Tom Price, Rex Tillerson, David Shulkin, Scott Pruitt, Jeff Sessions, Ryan Zinke, James Mattis, Kirstjen Nielsen, Alexander Acosta, Rick Perry, Elaine Chao, Betsy DeVos, James Comey, Andrew McCabe, H.R. McMaster, John Bolton, Dan Coats, Gordon Sondland, John F. Kelly, and Rod Rosenstein all left because I was so volatile.

Mr. Inflation: (sipping) Don’t forget (sipping) Michael Cohen…

Mr. Labor: Oh, now you’re coherent?

Powell: Mr. Inflation! Do I have to remind you we agreed to no Metamucil during the debate!

Mr. Inflation: You’re a convicted felon that sleeps with pornstars and yet the evangelicals support you? That makes less sense than your monthly job gains.

Mr. Labor: Strongest job market in history! Listen, Jay, jobs is jobs. A close friend told me that. Why should it matter if it’s part time? Not everyone can handle the grueling 25 hour work week of being president. Obviously, my opponent can’t.

Mr. Inflation: I will continue creating jobs by simply spending more money! I saw Harry Houdini in Atlantic City once and gee willy was he something. He could make jobs appear out of thin air.

Powell: But Mr. Inflation, do you worry that printing money will lead to more price increases?

Mr. Inflation: I will push prices higher than they’ve ever been before so that Big Pharma can’t keep taking advantage of the seniors.

Powell: Thank you for answering the question, “How can we make the man that refused to accept the election results appear more presidential than you?”

Mr. Labor: I have created so many jobs, even alley cats have jobs.

Mr. Inflation: You have the morals of an alley cat.

Alley Cats: wtf

Powell: Let’s wrap this up the way we began it…with a layup. Mr. Labor, will you accept the results of this election?

Mr. Labor: I will lower taxes, finish the wall, and institute tariffs to keep prices down.

Powell: But will you accept the results of the election?

Mr. Labor: Abortion will be more illegal than immigration.

Mr. Inflation: (blankly staring)…Have you seen The Bear? It’s great.

Powell: Yes or no – will you accept the results of the election?

Mr. Labor: If I win, yes. If I lose, it was rigged.

Mr. Inflation: If I win, it’s because JMo loses. Inflation is declining faster than my mental acuity.

Powell: The correct usage of the word “acuity” is perhaps your highlight of the evening. I think I speak for the nation when I say our pessimism will be higher for longer. Before we go, let’s cut to Vice President Kamala Harris for a quick reaction. Madam Vice President, your thoughts on this evening’s historic debate?

Harris: …

Powell: Well put. And thank you for the reminder on why Mr. Inflation can’t step aside. Next up for most viewers, CSI Richmond. For those on the west coast, a special French Laundry documentary hosted by Gavin Newsom.


The Week Ahead

Big week ahead for data as we get jobs, PMI, and Fed Minute reports. Powell will also speak ahead of the holiday.

Shout out to Tim Urban for the debate inspiration. His is way funnier than mine. I flat out plagiarized the alley cats bit but it cracked me up so I had to.