CPI: 8-month low
Core CPI: 5-year low
2025 Non-farm payrolls revision: -862,000 (worst since 2009)
Large bankruptcies: Worst since 2009
Credit card delinquencies: Worst since 2011
Vacancy-to-unemployed ratio: Worst since pandemic
Housing market buyers vs. sellers: Worst ever
But according to the Fed, every aspect of the economy is strong, and the only concern is inflation.
The Federal Reserve is not describing the economy; it is managing expectations to prevent a liquidity cascade. The 2025 benchmark revision of -862,000 payrolls confirms that resilience was a statistical mirage. When large bankruptcies hit 2009 levels and credit card delinquencies surpass a year peak, the lag effect of restrictive policy is no longer a risk it is the current reality. Sustaining a hawkish bias while core CPI hits a 5year low is not a strategy; it is a policy error in real-time.
