Is the Fed behind the curve?

Just as US inflation concerns moved into the rearview, the labor market started sending worrying signals, with the July jobs report triggering the Sahm rule—a widely-followed recession indicator. And this has come alongside growing concerns about the health of the US consumer as well as increased signs of weakness in the manufacturing sector. While Chair Powell clearly signaled a dovish pivot at Jackson Hole, whether the Fed has waited too long to cut rates amid this more worrying macro backdrop—and what that means for US recession risk—is Top of Mind.