Weekly Signal & Noise Filter

Inflationary Wage Spiral Risk Remains Low

The week was noisy, with conflicting data and price action leading to multiple repricings of the Fed’s policy trajectory.

In the post-FOMC press conference, Chair Powell was initially offering boiler plate platitudes for a hold, then did a-180 with a cagey response that spooked the bond market by expressing policy rigidity against a March cut.

After the press conference, jobs day came in hot on the surface, with the U3 unemployment rate at 3.7% and 353K jobs added in January.  Also, last month’s 216K print was revised up to 333K.

Below the surface however, the data was a mixed.