Weekly Update
July 13, 2026
Upcoming Events
Monday, July 13
Bowman Speaks at the Bank Policy Institute (BPI) Roundtable
Waller Speaks at New York Association for Business Economics
Tuesday, July 14
Consumer Price Index Release
Goolsbee Participates in Fireside Chat at Kenosha Area Business Alliance Business Lunch
Barr Speaks at the Federal Reserve Board Annual Financial Inclusion Conference
Barr Holds Discussion at the Federal Reserve Board Annual Financial Inclusion Conference
Cook Holds Discussion at the Federal Reserve Board Annual Financial Inclusion Conference
Bowman Speaks at the Federal Reserve Board Annual Financial Inclusion Conference
Wednesday, July 15
Producer Price Index Release
Beige Book Release
Williams Delivers Remarks at “A Conversation with New York Fed President John C. Williams”
Cook Speaks at the Exchequer Club Luncheon
Thursday, July 16
GDPNow Update
Jefferson Speaks at “In Conversation with Philip Jefferson”
Friday, July 17
Industrial Production and Capacity Utilization Release
Surveys of Consumers Release
GDPNow Update
Recent News
Consumer Expectations Shift… The New York Fed’s June Survey of Consumer Expectations, out last week, showed households bracing for more near-term inflation but feeling steadier about jobs. Median one-year-ahead inflation expectations rose 0.2 point to 3.7 percent, the highest since September 2023, and three-year-ahead expectations rose to 3.3 percent, the highest since June 2022, while the five-year measure held at 3.0 percent. Expected gas price growth bucked the trend, tumbling 3.5 points to 1.5 percent. On the labor side, the perceived odds of losing one’s job fell to 14.1 percent and of finding new work rose to 44.9 percent. Households also felt better about their current finances, even as more expect credit to tighten ahead.
Cooling Growth… The Atlanta Fed now estimates real gross domestic product (GDP) will grow at an annualized rate of just 1.3 percent in 2026:Q2, according to the latest GDPNow update released on July 8. That marks a sharp downgrade from the 2.5 percent pace the model projected as of late June, and it sits well below the 2.2 percent real GDP growth the median Federal Open Market Committee (FOMC) member penciled in for the year.
Two Thoughts on Transmission… Governor Christopher Waller used a July 6 Bank of Italy conference to offer two ideas about how monetary policy actually reaches the economy, both cutting against the reflex to lean on historical averages when the present looks nothing like the past. His first point: initial conditions are everything, so policy should be set from what is happening now, not the average of past cycles. He pointed to 2022, when a record ratio of two job vacancies per unemployed worker let firms respond to tighter policy by cutting openings rather than jobs, so unemployment rose only modestly rather than spiking as many had feared. Big, sudden shocks also change behavior, he argued, making the usual linear models and long lags misleading.
His second idea, that forward guidance is more art than science. Used well it pulls the future forward, as when the mere signal of coming hikes in late 2021 lifted two-year Treasury yields nearly 200 basis points before the FOMC moved. Used rigidly it backfires, as with the September 2020 guidance that tied the Committee’s hands as inflation surged in 2021. Guidance, he said, is hardest to give when scenarios genuinely diverge and you can’t average your way to a base case. So the takeaway is that forward guidance can help speed up policy transmission, but if it is not flexible enough, it can hinder policy transmission. And, in some cases, it’s best not to use it at all:
I am driving and come to an intersection. The light turns yellow. I can stop before the intersection and sit through the light. Or I can drive through the intersection and keep going. But my base case is not to stop in the middle of the intersection.
The timing is notable: Waller’s skepticism of rigid guidance lands just weeks after Chairman Warsh stripped forward guidance from the FOMC’s post-meeting statement, suggesting his view has company at the top of the Committee.
Sound Money Project Roundup
Why Is the Federal Reserve Paying Banks Billions in Interest? - Thomas L. Hogan
Trump v. Cook Carve-Out Leaves the Fed Above the Law - Alexander W. Salter
The Fed Needs Independence, Not Immunity - Nicolas Cachanosky