Kena Solutions (2025)

13/09/2025

Double whammy for Americans: Inflation continues to rise as jobs outlook grows weaker

CNN Business: The cost of living continues to increase for Americans at a time when the job market appears to be on shakier footing, creating a complicated economic problem that could be tricky to solve.

Consumer prices rose 0.4% in August, driving the annual inflation rate to 2.9%, the highest since January, according to Bureau of Labor Statistics data released Thursday. The reading marked an acceleration from the 2.7% increase seen in July, with price hikes driving up the cost of Americans’ most basic needs.

Grocery and fuel prices shot higher in August after falling the month before. Food at home prices rose 0.6% — the highest monthly jump in nearly three years — and gas prices climbed by 1.9% after falling 2.2% the month before.
The latest Consumer Price Index provided further evidence that some costs from President Donald Trump’s policies, such as sweeping immigration reform and steep tariffs, are slowly being passed along to consumers, economist Dean Baker, co-founder of the Center for Economic and Policy Research, told CNN on Thursday.

Paychecks also aren’t going as far as they used to: Real (inflation-adjusted) hourly earnings slowed to 0.7% in August, the lowest gain in more than a year, BLS data shows.

“The consumer aspects of this are actually more problematic politically than the tariff aspects are right now for the administration,” Tyler Schipper, associate professor in economics and data analysis at the University of St. Thomas in St. Paul, Minnesota. “Even if real earnings are up, consumers don’t perceive it that way, and this report indicates that things at the grocery store are still getting more expensive.”
“And that’s just going to harden those beliefs that their economic worlds aren’t getting better,” he added. - CNN Business

12/09/2025

Records were made to be broken — Dow nudges above 46K for the first time ever

"If you're not the lead dog, the view never changes"

As the market continues to push through new highs, the consistency and elevation of the noise level around why? is in some ways detracting from the accomplishment. Sustainable? beats me! Applaudable? Most definitely. Take a well deserved bow. Achievemephobia (my new SAT word) or resentment that you missed the run and retracting that is like trying to turn the Queen Mary in the East River. We get a first blush at consumer sentiment this morning and I would say that there is no cigar for guessing that people are “none too happy” and are looking down the road for “more of the same.” TGIFF and it’s gotta be 5 O’ clock somewhere. - murph

S&P 500 futures slip after big rally this week as Fed decision looms

CNBC: S&P 500 futures fell slightly on Friday after the market surged to fresh records as investors took signs of weakening jobs and tame inflation to mean the Federal Reserve will lower interest rates next week.

The consumer price index showed a month-to-month increase of 0.4% for August, hotter than the 0.3% that economists polled by Dow Jones were expecting. However, the index's 2.9% rise on a 12-month basis was in line with expectations.

The usually crucial inflation report was overshadowed by weekly jobless claims, which showed a surprise jump to the highest level since October 2021. Workers filing for unemployment compensation for the week ended Sept. 6 increased 27,000 to 263,000, more than the 235,000 total expected.

"Today's (yesterday’s) CPI report has been trumped by the jobless claims report," said Seema Shah, chief global strategist at Principal Asset Management. "While the CPI report is a tad hotter than expected, it will not give the Fed a moment of hesitation when they announce a rate cut next week. If anything, the jump in jobless claims will inject a bit more urgency in the Fed's decision making, with [Fed Chair Jerome] Powell likely signaling a sequence of rate cuts is on the way." - CNBC

Down the Shore we are “tripping the light fantastic” into what is predicted to be one of those classic Autumn weekends.

May the road rise to meet you.
GRMA ☘️

11/09/2025

CPI — behind the numbers — Whose Money Is It Anyway?

Inflation in 2025 wasn’t just about one big spike, it was a mix of slow climbs and sudden changes across gas, groceries, and rent. The most striking aspect was how even small monthly shifts quietly add up — especially with rent. It makes one think about how much control we really have over our money when basic costs are constantly shifting.

11/09/2025

Clear as muddy water

The market got out of the gates in a hurry this morning despite a better than expected CPI print which, in and of itself, was a little hard to get owns arms around. Lack of clarity is generally a death knell for investors but I think the pent-up demand trumped that and opened the flood gates. There is still a lot of green between now and the FOMC meeting next week, but each successive date point appears to be making the case for the current “data dependent” committee to go ahead and cut. The debate on rates appears to have morphed from “if/when” into “how much” will he cut. 25 basis points, basically incomprehensible a few months, ago in now being seen as merely a speed bump into a spate of cuts. If one relies on past performance, 25 basis points is “what you will get and like it!” 50 basis points is in the land of getting too far over ones skis and if “too to much too soon” will be a very slippery slope to regain one’s balance. - murph

S&P 500 rises to record as traders bet August inflation increase won't derail Fed rate cut next week

CNBC: It was a confusing batch of numbers, with the consumer price index reading for August coming in hotter than expected on a monthly basis but in line with expectations on an annual basis.

The CPI reading showed an increase of 0.4% for the month, according to the Bureau of Labor Statistics, higher than the 0.3% that economists polled by Dow Jones were expecting. However, the index recorded 2.9% on a 12-month basis, as expected.

Additionally, so-called core CPI, which excludes volatile food and energy, increased 0.3% in August and 3.1% from a year ago. Both were in line with the Dow Jones forecasts.

The report comes a day after the producer price index showed an unexpected decline of 0.1% on the month. The PPI rose 2.6% on a 12-month basis.
Also on Thursday, weekly jobless claims saw a surprise jump. The figure for the week ended Sept. 6 increased 27,000 from the previous period to a seasonally adjusted 263,000. That's more than the 235,000 that was penciled in.

Traders still largely expect that the Fed will cut rates by a quarter percentage point on Sept. 17, per the CME FedWatch tool. They even slightly increased their bets that the central bank will cut by a half percentage point.- CNBC

Down the Shore we are taking a few minutes to bow our heads and remember all those we lost and all those left behind to grieve and carry on the tradition of “Let Us Never Forget.”

“People have two deaths: the first at the end of their lives, when they go away, and the second at the end of the memory of their lives, when all who member them are gone. Then a person quits the world completely.” Raghu Karnad.

10/09/2025

Pumping the brakes on inflation

⛽ Gasoline PPI (2019–2025)
"When it comes to inflation, gasoline is the spark that can set the fire or put it out."

The Producer Price Index for gasoline has been one of the most volatile pieces of wholesale inflation over the past six years.

From 2019 through mid-2022, swings were extreme, with prices collapsing by more than –60% during early 2020 before surging to record highs in mid-2022 when the index spiked above +70% year-over-year.

Since then, the trend has moderated but remains choppy — with month-to-month changes ranging from gains of +20% to declines of –10%.

⛽ Overall, the August 2025 reading shows gasoline PPI down about –1.5% from July, pointing to softer inflation pressure compared to earlier years.

Still, the long view reminds us that gasoline is a constant swing factor in the PPI, capable of driving both sharp spikes and sudden relief in producer costs.

10/09/2025

We’re with you win or tie Or Heads I win, Tails you lose

Early this morning traders were leaning into the prospect that PPI would not be all that bad. Well, PPI went ahead and exceeded expectations, and yet investors are skeptical. And who can blame them? PPI, while important, is a good bench player, but CPI, a potential game changer is due out tomorrow and the franchise player PCE is still doing warm-ups on the sideline. The market wants to do the right thing and is currently struggling to find direction, but no one appears brave enough to be the first to stick their neck out. - murph

“There is a tide in the affairs of men
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat;
And we must take the current when it serves,
Or lose our ventures.”
― William Shakespeare

Wholesale prices surprisingly fell slightly in August, providing breathing room for the Federal Reserve to approve an interest rate cut at its meeting this month, according to a Bureau of Labor Statistics report Wednesday.

The release comes a week ahead of when the central bank’s Federal Open Market Committee releases its decision on its key overnight borrowing rate.

Futures market pricing implies a 100% probability that the committee will approve its first rate cut since December 2024, though the PPI release and a consumer price reading tomorrow are being watched closely for indications of whether policymakers will follow through.

Though inflation remains well above the Fed’s 2% target, officials have expressed confidence that easing housing and wage pressures will push prices lower, if only gradually.

The Fed has resisted rate cuts this year as officials monitor the impact from President Donald Trump’s aggressive tariffs against U.S. imports. Tariffs historically have not been a lasting cause of inflation, but the broad-based nature of Trump’s moves have raised concern that this episode could be different.

Concerns have been rising at the Fed over the employment picture while inflation fears have abated. A BLS report Tuesday indicating that the economy created nearly 1 million fewer jobs than initially reported in the year preceding March 2025 raised worries that the labor market is in trouble even as Fed officials consistently have characterized the picture as “solid.”

The Fed meeting next week will feature both a rate decision and an update on where officials see the economy and interest rates headed in the future.

Down the Shore,

Farewell to Summer

Golden leaves
Fall to rot in puddles
The party’s over
The guests left with the sun
The wine’s all gone
We drank it til we were dizzy
The Summer is lost
It left
We were all too busy
with our own farewells
To even wave adieu.
- murph

10/09/2025

Fed seen on track for three rate cuts this year, starting next week

Reuters: The Federal Reserve will likely resume cutting short-term rates next week and continue on for the rest of the year to shore up a labor market that may have begun cooling well before President Donald Trump began imposing sharply higher tariffs, traders bet on Tuesday.

The Labor Department's Bureau of Labor Statistics' preliminary annual revision to its payrolls data showed the U.S. economy likely created 911,000 fewer jobs in the 12 months through March than previously estimated, suggesting average monthly payrolls gains were likely less than half of the 147,000 that had been reported.

Coupled with recent labor market data that shows monthly employment gains have slowed even further, the report "gives the Fed another reason to lower rates next week," BMO economist Sal Guatieri wrote, and likely cements the case for more rate cuts by year-end than the two that Fed policymakers had projected back in June.

The Fed gets a pair of inflation reports later this week expected to reflect ongoing upward price pressures. - Reuters

09/09/2025

Should I stay or should I fold — Paralysis by analysis?

Should I stay, or should I go now?
Should I stay, or should I go now?
If I go, there will be trouble
And if I stay, it will be double
So come on and let me know
- The Clash

This morning’s “up, down, all around the town” open offers a perfect look into what must be going on in the Fed’s decision making process regarding do we hold steady on rates or fold, which is exacerbated by the slew of major economic releases on the table this week, CPI being the Magilla Gorilla. Consensus has been for a while now that a reduction was inevitable and the prudent thing to do, but, hold the phone, what if the economic releases do not jive with expectations. Dare I say that a rate hike has been whispered as a “get out of jail card.” Yes, it is corporate numbers that drive immediate stock markets, but implications and “what ifs” surrounding the upcoming CPI release have much further reaching implications — both positively and negatively depending or how the cookie crumbles. - murph

Stock futures tick higher as Nasdaq tries to build on record

CNBC: U.S. stock futures rose slightly on Tuesday after the Nasdaq Composite hit a new record.

But investors are now awaiting two key inflation reports that could determine what Federal Reserve policymakers will do at their meeting next week. Last week, a surprisingly weak jobs report added to hopes the path for interest rates is lower. However, any surprising strength in the inflation readings could throw a wrench in that outlook. The August producer price index report is due out Wednesday morning, while the consumer price index is set to release on Thursday.

"When the labor market is weakening, the Fed is supposed to cut rates. The problem is that for Thursday's CPI number, the consensus is now expecting inflation to go up from 2.7% to 2.9%" Torsten Slok, chief economist at Apollo Global Management, told CNBC's "Squawk on the Street." "And that is exactly muddying the picture, because when inflation goes up, the Fed should be hiking." - CNBC

Down the Shore like the market, we are desperately rooting for the sun to break through the clouds. “Life is about attitude and how we choose to interpret situations. Is the glass half empty or half full, the weather forecast partially cloudy or partially sunny? Simple choices can make or break a day. Choose wisely and enjoy the day.

May the road rise to meet you. GRMA ☘️

09/09/2025

Why CPI Matters So Much Ahead of the September Fed Meeting

So I asked ChatGPT to write an article on the importance of CPI as it relates to the September FOMC meeting. My mother would say this request was “the height of laziness and why didn’t I write my own article?” Fair point, but since ChatGPT and the myopic focus on economic releases are all the rage right now I thought I would reach out and get a broader perspective. “Hey! That’s my story and I’m sticking to it. I will give a nod and nicely done to the stylistic appropriation, the content? I leave up to you. Which brings me to another point for another post, but if it sounds like me, is it really me and are these truths, my truths? - murph

Take it away Mini ChapGPT Me
“Forget the noise — CPI is the only number that matters before September’s Fed meeting.”

As the September FOMC meeting looms, one number is about to take center stage: CPI.

Yes, the Fed prefers PCE as its official inflation gauge. But CPI is the release that actually moves markets. It’s faster, more visible, and impossible to ignore. And right now, it could be the deciding factor in whether the Fed cuts rates this month.

Here’s the fork in the road:
• Hot CPI: September cuts are off the table. The Fed will sit tight, and markets will reprice quickly. Expect bond yields to jump, stocks to wobble, and the dollar to strengthen.
• Cool CPI: That’s Powell’s opening. A softer print gives the Fed cover to finally ease without looking soft on inflation. Risk assets will rally.
• Mixed CPI: That’s the worst-case for clarity. Headline inflation down but sticky core services? The Fed stays cautious, and markets stay stuck in uncertainty.

This is about more than inflation. It’s about the Fed’s credibility. Powell doesn’t want to declare victory too soon, but he also knows waiting too long risks choking off growth. CPI, landing right before the September meeting, is the swing factor that forces the call.

Bottom line: This CPI isn’t just another data release. It’s the pivot point. If inflation is cooling, September could mark the start of a new rate path. If not, the wait continues. Either way, markets are bracing.

Stay tuned as we take a deep dive into some of the other noteworthy releases this week.

08/09/2025

Roll Over FOMC — Tell investors the news

Investor activity this morning reminds me of one of my mother’s favorite expressions “An ounce of prevention is worth a pound of cure.” The market is up as I write looking like it wants to run, but. We are once again headed into “Economic release week from hell,” which take on much more significance this go round — PPI, CPI, this week as a prelude to the FOMC meeting next week. Some pundits are predicting a 25 basis point move while others believe that anything below 50 basis points is just another nod to the pressure of “it’s about time, what were you waiting for?” Water, if left undisturbed, will gravitate to its own level appears to have been the mindset to date on this “data dependent” group — I don’t know that strategy is going to play going forward. - murph

CNBC: The S&P 500 ticked higher on Monday as investors gear up for a data-heavy week that includes two closely watched readings on inflation.

Investors are awaiting two critical inflation reports this week for more insight into the health of the economy, after weaker-than-expected hiring data on Friday. The producer price index report for August is due out Wednesday morning, followed by the consumer price index on Thursday.

The data follows the lackluster August jobs report that helped fuel investor hope that the Federal Reserve is all but assured to lower benchmark interest rates at its policy meeting later this month. The jobs figures also raised the prospect of a half-point rate cut, per trading data from the FedWatch tool.

"The weak jobs report supports our view that we're transitioning to early cycle — from rolling recession to rolling recovery," Morgan Stanley strategist Michael Wilson said in a Monday note. "Near-term risk is tied to whether the monetary policy response is significant enough. Potential choppiness in the short-term should set up a strong finish into both [year-end] & 2026." - CNBC

Down the Shore

Well, early in the morning I'm giving you my warning
Don't you step on my new shiny shoes
Hey di**le di**le, I'ma play my fiddle
Ain't got nothing to lose

Roll over Beethoven
Tell “Jay Powell” the news
- Chuck Berry
May the road rise to meet you.
GRMA ☘️

08/09/2025

The Week That Was — Work is still a four letter word

If you love what you are doing, you’ll never work a day in your life! Really? I wish someone had told me that 40 years ago because I loved Wall Street but worked my ass off to get there and stay there. The labor market was back in the news this week and it caused a bit of a “row and a ructions” while it was at it. I doubt the majority of people had the Johnny Cash to say “Take this job and shove it,” but unemployment nosed up which in turn is bringing the Fed back to the table. We are n for an interesting week next week as the forces of a “perfect storm” are gathering on the economic horizon. Murph

Edward Jones
The labor market softens: What does this mean for the Fed and interest rates?

This past week, there were clear signals of a softening U.S. labor market. The August jobs reported indicated 22,000 jobs added last month, well below the expectations of 75,000. The unemployment rate also ticked higher from 4.2% to 4.3%.

Historically, if the Fed is lowering interest rates, and the economy is not headed toward an imminent recession, market outcomes are more favorable. While investors may experience bouts of market volatility as we navigate a softening labor-market backdrop, we believe the conditions remain in place for solid economic growth in the year ahead.

All eyes likely turn to inflation next week
The Federal Reserve has two mandates – maximum employment and stable prices. The second mandate of inflation will come to the forefront once again next week. Investors will get both consumer price index (CPI) and producer price index (PPI) inflation figures for the month of August on Wednesday and Thursday next week, the last reading ahead of the September 17 FOMC meeting.

The expectation is that headline CPI inflation will tick higher to 2.9% annually, up from 2.7% last month, although core CPI, excluding food and energy, will remain steady at 3.1%1. PPI inflation is forecast to tick lower from 3.7% to 3.5%, while core PPI is expected to fall from 3.3% to 3.2%1. Both sets of inflation metrics remain above the Fed's 2% target, and the higher PPI inflation implies that companies are still facing pricing pressures from their wholesalers, likely driven in part by higher tariff rates.

Nonetheless, we think there are a couple of mitigating factors to the inflation rates that continue to remain above target and are in some cases creeping higher. First, as the Fed has indicated, tariff-induced inflation on goods may continue to show up in the months ahead, but we would also expect inflation rates to stabilize and move lower after the one-time step-ups in prices are realized. And second, while goods inflation makes up about 33% of the inflation basket, services inflation makes up about 66%. If services inflation, which include shelter and rent pricing, start to soften, especially as the labor market softens, we could still see overall inflation rates remain steady or even move lower.

05/09/2025

Wall Street indexes end lower as jobs data fuels economic worries

The labor market is going to remain a very important indicator for how this economic picture plays out, but so far consumer spending has really surprised many people despite softening in the labor market."

The U.S. economy created 22,000 jobs last month instead of an estimated 75,000, confirming softening labor market conditions, according to the Labor Department report.

The three major U.S. stock indexes initially rose and broke records following the data, as traders of futures tied to the Fed's policy rate boosted bets that the U.S. central bank will trim rates in quick succession, starting this month, with a 50-basis-point easing now on the table.

The major indexes ended well off their lows of the session.

"It's going to take more than one bad data set for us to dislodge this market at this point," said Pete Mulmat, CEO of IG North America, parent company of tastytrade, in Chicago.

With so much focus on the rate outlook, U.S. stock investors will pay close attention to inflation data in the coming week. The monthly U.S. consumer price index is due on Thursday

Kena Solutions

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