Memo to the Fed: The Economy's Growth Scare Is Your Wake-Up Call
Markets are worried that the Fed could get blindsided. Rather than a half-percentage-point rate cut in September, expect quarter-percentage-point cuts at each of the next four Federal Reserve meetings.Friday's July jobs report capped a week of disappointing economic releases that collectively put the economy on recession watch. Jobless claims are up, payrolls growth and wage growth are weakening, and the outlook for the highly cyclical manufacturing industry is deteriorating.Markets think the U.S. Federal Reserve is behind the curve, and that perception could be as damaging as its reality.There are several reasons why mid-2024 could prove an exception to the Sahm Rule. Hurricane Beryl shut down large swathes of the Houston economy in July, affecting more than 2% of Americans - a headwind that is quickly fading. The auto industry retools in the summer months, which may be behind some of the weak manufacturing sentiment and hiring. And many members of the recent wave of new immigrants ar