A few things ahead of a possibly eventful week

I argue again that the best path Jay Powell can take in his speech Friday, and something I recommend too to his colleagues, is to focus on the September meeting only (basically telling us you'll cut as the market expects) and not prognosticate about what you'll do after that because the economic landscape is clear as mud. Non voting member taking Raphael Bostic is taking that same tact, especially after a three day trip visiting households and businesses in meetings in Alabama and Mississippi, regions he covers. "Today, I think my strategic approach would be 'move and wait.' It might be that it will take some time for the economy to evolve after a move that we do, in ways that make clear sort of what the next step would need to be" he said late last week.

According to the Bloomberg News story that covered this trip, it also said "Tariff costs are actually real costs," he said. While many firms have absorbed some of the shock to shield consumers, "they don't think they can do that forever," said Bostic. "And time is getting short."

I agree with the theoretical economic concept that a tax (tariff in this case) is a one time price reset but I'll also argue that it is much more nuanced than that as if supply chains get shifted and tossed around in response to tariffs, the price impact can be multi year.