UPDATE SEPTEMBER 11, 2025 – RIP Charlie Kirk and Never Forget 9/11. This country and world need a lot of help is all I will say.
August CPI came in on target at 2.9%. The data points to 3.0% next month followed by a surge above 3% through yearend. Again, whether there were tariffs or not, this was going to happen. Tariffs are not relevant.
As of today, the market has set the Fed Funds Rate at 3.7%-3.9%.
SEPTEMBER 8, 2025 – The consensus, and my data, expect CPI to increase to 2.9% from last month’s 2.7%, Just a reminder, this has nothing to do with tariffs. But, those who think it does will be screaming they are right. The market is giving a 100% chance that the Fed will reduce its rate at the September meeting by 25bp. A 12% chance it will be 50bp. Currently, the market has the Fed Funds Rate priced at 3.9%-4.0%. It is set at 4.25%-4.5%. As I have said all along, the market would put rates at a point that tells the Fed to lower them by 25bp, with a minor chance of 50bp. I believe we are around a bottom for interest rates. So, I think it will be unlikely we see a 50bp reduction. Let me conclude with what I wrote on August 8th: “Let me say this in advance – technical indicators are suggesting higher rates after September. Also, if CPI does go to 3.0%-3.5% in the 4th Quarter, a rate increase before yearend is more likely than a second or third rate decrease. That would surely infuriate a lot of people. You heard it here first. I will address this more as we enter the Fall.” Shalom, The Mann
AUGUST 12, 2025 – The July report came in at 2.7%, a tick below the range that the data predicted and analysts expected. The 3-month annualized inflation rate is 2.8%. The 6-month annualized inflation rate is 3.4%. These figures are above the annualized rate (2.7%), and, thus indicate the annual CPI should increase slightly over the next few months. The data is predicting a reading of 2.9% next month. I think that will be spot on. The pundits and economists that have been calling for surging inflation due to tariffs have been 100% wrong. Again today, they are all saying just wait, it is coming. Lucky for them, it is looking like a sure thing that the CPI will be between 3.0% and 3.5% during the 4th Quarter. This will occur with or without tariffs. As we have seen all year, tariffs are not relevant. The market is giving an 89% chance that the Fed will reduce its rate at the September meeting, Currently, the market has the Fed Funds Rate priced at 4.1%-4.3%. It is set at 4.25%-4.5%. We have 5 weeks until decision time. If rates tick down another 10bp or such, a 25bp rate cut would be appropriate. Let me say this in advance – technical indicators are suggesting higher rates after September. Also, if CPI does go to 3.0%-3.5% in the 4th Quarter, a rate increase before yearend is more likely than a second or third rate decrease. That would surely infuriate a lot of people. You heard it here first. I will address this more as we enter the Fall. Shalom, The Mann
UPDATE AUGUST 15, 2025 – RIP any chance of a recession occurring this year. The Dow hit an all-time high this morning above 45,200. Don’t worry about a recession this year. With a good chance of CPI being above 3% in the 4th Quarter (as I noted in another post, that has NOTHING to do with tariffs), that is the only item for you to deal with that might affect your decision-making.
AUGUST 1, 2025 – With the Jobs Report coming in very weak today, immediately the pundits began screaming that a recession was occurring. Let me be clear and to the point – there is a 0% (!) chance of a recession occurring this year. No doublespeak from me:) With the 3rd Quarter GDP very likely to be positive, we will not have two consecutive negative quarters this year. As I noted before, the 1st Quarter GDP was only negative because of an atypical trade issue due to the tariffs. Averaging out the first quarters, GDP has been above 1% this year. It will likely end the year up 1.5%-2.0%. This is an EXTREMELY STRONG economy. GDP growing at over twice the rate of population indicates a strong economy. Another indicator used to forecast recessions is the yield curve. It is currently a negative 35bp. We are a long way from +100bp which will indicate we are in a recession. Also, the stock market has made it clear that the economy will be strong through yearend. Yes, a hiccup and bit of a slowdown here and there are likely. But, overall, growth will be strong and a recession will not occur this year. Let the recession-screaming pundits show how wrong they are over the next five months. Shalom, The Mann
UPDATE AUGUST 4, 2025 – After the Job Report, the market adjusted the Fed Funds Rate to 4.0%-4.2%. This is getting the Fed set up to lower the rate 25bp in September. But, that is over 7 weeks away. The market can change its mind in the interim.
JULY 30, 2025 – You can go back to my July 1st post that says the following: “1st Quarter GDP was adjusted to -0.5%. 2nd Quarter GDP should come in around 3% (2.5%-4.0% seems to be the consensus). The average for the first half of the year should be around 1.3%.” 2nd Quarter GDP came in at exactly 3.0%. I’ll take that, albeit just a lucky guess on my part. The consensus ended up being +2.3%. The Tariff Mongers now have to start screaming about the rest of the year being doomsday. A stopped clock is right twice a day. Which is two more times than the Tariff Mongers will be:) As noted, in my Fed Funds Rate posts, the Fed did as the market told them to do – no change in the rate. The Fed following the market 100% of the time continues. It will be interesting to see if Powell’s successor lowers rates when the market is saying not to. That would be unprecedented and I think it will cause major market turmoil. We will revisit this when we get to that bridge. My ad nauseum reminder to you is what actually predicted the above two items? The market. Not The Mann. I simply interpret what the market is saying. Six months in advance the stock market said the economy would have a hiccup in the 1st Quarter followed by strength in the 2nd Quarter. It is saying the same for the 3rd and 4th Quarters. So, any weakness in the 3rd Quarter (early estimates are above +2%) will let the Tariff Mongers say they are right. The 4th Quarter will show they were never right. Remember, ignore all the pundits. Simply watch what the market is forecasting 6 months in advance. It is that easy. And it is free information:) Shalom, The Mann
UPDATE JULY 29, 2025 – It’s the day before the Fed announcement. As noted below, interest rates have not changed in the past 2 weeks. The market still has the Fed Funds Rate priced at 4.3%-4.4%. Right in the middle of the current 4.25%-4.5% range. The rate should remain unchanged and Trump should still be mad at Powell. The market is pricing in a reduction in September. I will see where we stand in two months.
JULY 15, 2025 – The June report came in at 2.7%, a tick above the range that the data predicted. The 3-month annualized inflation rate is 3.5%. The 6-month annualized inflation rate is 4.4%. These figures are above the annualized rate (2.7%) and thus indicate the annual CPI should increase over the next few months. The data is predicting a reading of 2.8%-2.9% next month. I think that will be spot on. Please note, the CPI increases this Summer will be because inflation was around 0.1% per month last Summer. The increases will not be due to tariffs. On July 30th at 2pm Eastern, the Fed will announce its decision on the Fed Funds Rate. The market has the Fed Funds Rate priced at 4.3%-4.4%. It is currently 4.25%-4.5%. The market is telling Mr. Powell not to cut the rate. Things can change in two weeks. But, that is doubtful as rates have been steady for awhile. A sure bet is President Trump will tweet soon thereafter condemning Powell again:) Shalom, The Mann
JULY 2, 2025 – The next FOMC meeting is July 29th and 30th. I believe the rate decision is announced on the second day – i.e. July 30th. As I have informed you for years, the market dictates the Fed Funds Rate. The Fed simply follows with an announcement moving it towards where the market says it should be. Currently, the Fed Funds Rate ranges from 4.25% to 4.5% with the effective rate being 4.33%. The market has the Fed Funds Rate set at 4.1%-4.3%. The market says there is a 25% chance of a rate reduction. Based on the above, there is no need for the Fed to reduce the rate. Maybe a 1/8% reduction can be justified. But, I believe it has only been moving the FFR in 1/4% increments. Due to the extreme pressure from the outside, and Trump supporters on the FOMC, I would not be surprised to see a 1/4% reduction. A range of 4.0%-4.25% would fit the current market range well. The market’s 25% expectation is probably right on target. This likely comes down to Powell saying hey the Fed is independent and I will not bow to this pressure. Or him saying what the heck, let’s appease the world and lower the FFR 25 basis points. I have no opinion to offer. I let the market make the decision for Powell. With 4 weeks to go, the market could easily bring the rate range down another 10 or 20bp and make the 1/4% reduction a slam dunk. Or raise rates and make no change the slam dunk. Let the market tell us. Ignore the pundits who are just guessing. Shalom, The Mann
JULY 1, 2025 – The first half of the year is over. And what a 6 months it was! Of course, most analysts are predicting a recession this year due to the tariffs. Do tariffs have anything to do with a recession? You know my answer – NO! What is the sole indicator to watch for a future recession – the stock market. Let’s look at some numbers to see what the future holds. 1st Quarter GDP was adjusted to -0.5%. 2nd Quarter GDP should come in around 3% (2.5%-4.0% seems to be the consensus). The average for the first half of the year should be around 1.3%. As I mentioned in my last economy post, 1st Quarter GDP was artificially low by 2% due to extreme import trade. This will be reversed in the 2nd Quarter GDP. So, this cancels out and that is why the average of the first two quarters is the best indicator of GDP for the year-to-date. For a recession to occur this year, the 3rd and 4th Quarters will need to have negative GDP readings. Based on the stock market (the Dow 30 is within about 1% of a new high, while most other indices have new all-time highs), the economy should be very strong as the year end. The March/April downturn does suggest a negative surprise will occur in September/October. But, the odds of two consecutive negative GDP quarterly readings is very low. Thus, an ‘official’ recession is unlikely at this point. Shalom, The Mann
JUNE 12, 2025 – The May report came in at 2.4%, at the lower end of the range that the data predicted. The most ridiculous forecast was from Goldman Sachs that expected a 2.9% reading. They could pay me half of what they pay their CPI staff and save lots of money and be more accurate with their forecasts. LOL The 3-month annualized inflation rate is 3.0%. The 6-month annualized inflation rate is 3.8%. These figures are above the annualized rate (2.4%) and thus indicate the annual CPI should increase slightly. The data is predicting a reading of 2.6% next month. I think that will be in the ballpark. There is a chance it could go as high as 2.8%. The one thing today’s reading showed us is tariffs do not cause inflation. The market has the Fed Funds Rate priced at 4.3-4.4%. It was recently cut to 4.25%-4.5%. The Fed doesn’t have any catching up to do. There will not be a reduction in this rate at next week’s Fed meeting. Also, President Trump will tweet soon thereafter condemning Powell again:) Shalom, The Mann
MAY 14, 2025 – The April report came in at 2.3%, right in the middle of the range that the data predicted. The 3-month annualized inflation rate is 3.9%. The 6-month annualized inflation rate is 3.3%. These figures are above the annualized rate (2.3%) and thus indicate the annual CPI should increase slightly. The data is predicting a reading of 2.4%-2.5% next month. I think that will be in the ballpark. There is a chance it may stay at 2.3%. The market has the Fed Funds Rate priced at 4.1-4.3%. It was recently cut to 4.25%-4.5%. The Fed doesn’t have any catching up to do. Shalom, The Mann
MAY 2, 2025 – It is really difficult to write anything about the economy after the passing of KC Conway, CRE, MAI this week. KC was a great guy. Brilliant mind. The last 20+ years of his career he turned his focus to being an economist. Everyone liked KC. A rare individual. He will be missed by our industry and obviously his family and friends. RIP my friend. Very briefly, 1st Quarter GDP came in at a -0.3%. As I mentioned in my April 5th post, and last August, the stock market was forecasting a huge negative surprise for this quarter. 99%+ of us had no clue what would cause it. That doesn’t matter. The stock market just says it will happen. My last email to KC went unanswered. I now know why. I was wondering how much of the GDP reading was attributed to the extreme import trade as companies rushed to beat the tariffs. KC never replied. I have since heard it was probably around 2.0%. So, the actual GDP would have been around +1.7%. As the import trade will be the reverse in the 2nd Quarter and companies will have stopped ordering from overseas, this will ‘falsely’ inflate the GDP by a similar amount. Early indications are around +2%. This might fall as the economy will definitely be weakening into the Summer. But, the odds of two consecutive negative GDP quarterly readings is very low. Thus, an ‘official’ recession is unlikely at this point. That said, the market has forecast significant weakness at the beginning of the Fall. Things should be much clearer by then. As an aside, the DOW Industrials never did trigger a Bear Market. They came close like last August. That’s enough. Remember, to enjoy EVERY day of your life. We do not know when it will be our last. Shalom, The Mann
