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Shots fired! An insurgent brigade of renegade Wall Street economists is revolting against the Federal Reserve's hawkish interest rate regime - calling Chairman Jerome Powell's steady-as-she-goes stance dangerously detached from reality's deteriorating economic landscape.
Leading this rebel alliance's charge for an immediate dovish pivot? None other than Goldman Sachs' big gunpowder-keg Jan Hatzius unleashing a full-throated salvo for preemptive rate cuts to commence at the FOMC's July 30th policy summit. Observing the smoking craters of slowing growth, rising unemployment, and yep, even receding inflation around him, Hatzius' decree is unambiguous:
"If the case for a cut is clear, why wait another seven weeks before delivering it?"
Amen, brother Jan! Why settle for more collateral damage when monetary snipers hold all the surgical precision required to defuse this high-stakes stalemate? Wave that white flag already and evacuate those sky-high rate levels while salvaging what's left of economic momentum!
And Hatzius is far from alone storming those entrenched FOMC foxholes. No, fellow rebellious renegades like Mohamed El-Erian are amassing reinforcements FAST - rightfully blasting the Fed for dithering needlessly behind woefully outdated policy prescriptions.
"Waiting too long risks a higher peak in unemployment for little additional reward on the inflation front," laments Renaissance Macro maestro Neil Dutta in rallying cries echoing across this seditious economist accelerant.
Think about it - even Wall Street quant math like the vaunted Taylor Rule shows current 5.25% rate levels are essentially rubbing salt in a still-open economic wound! How's THAT for friendly fire?
Sure, sure - I hear the hawkish holdouts lobbing flak from their dwindling redoubts about premature "declaring victory" and making "lurches" before getting inflation firmly under control. But that's precisely the chicken-hearted stuff this gung-ho rebellion train left behind at the station!
Is your bank next?
A powerful new trend is spreading like wildfire inside the US financial system. At least 41 banks are already involved.But the Federal Reserve predicts that number will grow fast.
See if your bank is involved right here.
Why keep slaughtering innocent businesses and consumer budgets on some ideological altar of eviscerating EVERY shred of hot PPI and CPI prints? That's just myopic overkill extending utterly unnecessary battlefield misery!
Call me crazy, but far safer paths exist like simply front-loading cuts NOW before ultra-lagging rate impacts infect the REAL economy beyond just bubbly asset valuations. Yes, pace things more deliberately after that point, but sheesh - at least provide some initial respite from monetary strangulation without fear-mongering everybody awaiting a dead-cat-bounce relapse in temporarily tamed inflation metrics!
Look no further than the June FOMC projections revealing roughly half the committee prefers either outright standing pat through year-end OR executing just a single symbolic 25 bps snipe to at least acknowledge reality's reset. Glorified meatgrinder purgatory is hardly a winning battlefield strategy! Maximum economic hardship simply to sate irrational inflation xenophobia?
Heck, as this rebellion's surging momentum continues dispensing truth juice upon Powell & Co.'s stubbornly parched "meeting-to-meeting" malarkey, you can easily envision further "cut in July" firebrands joining the anti-hawk crusade like Chicago's Austan Goolsbee or San Francisco's Mary Daly. Everyone's waiting for the first crack to form in that concrete hawkish facade before doubling down on maximum pressure for substantive, immediate rate respite.
Make no mistake - this rate rebellion's flashpoint culminates in less than two weeks once monthly CPI and payroll figures hit. Further tepid inflation alongside cresting labor market slack, and even the Fed's own fuzzy "forecast" camouflage gets exposed under this barrage of pure economic vindication.
So spare me the shrill bluster about "not overshooting" full employment or whatever next contrarian smokescreen defensive line forms to forestall overdue rate relief. Perpetuating rigid tight money conditions AFTER successfully cooling the economy's inflationary fever is just plain malpractice writ large!
Bottom line: Chairman Powell faces outright mutiny risks unless preemptively caving to overwhelming economic reality and common sense. Thankfully the path to heroic monetary pivot and reputation redemption remains straightforward - simply hear out these rebel infantry economists rather than resigning everyone to needless defeat.
Because just like any misguided siege bound to eventually break under withering counterattack, the only remaining question surrounds how much unnecessary economic carnage stubbornly plows on before sanity and survival instincts finally kick in.
Hey hawks - no shame in gracefully retiring from further hostilities when overwhelming forces threaten consuming you whole! The rate rebellion is nigh, so make the smart play by throwing down arms and joining humanity on the side of growth before this rout turns even uglier.
