Bloomberg Chief Economist: Warsh Watches Three Key Indicators, Current Data Shows Limited Room for Rate Hikes

BlockBeats news, September 17 — Bloomberg Chief Economist Anna Wong published an analysis of key information revealed in last night's speech by Federal Reserve Chairman Warsh. Wong believes that Warsh currently observes the economy and inflation through three independent indicators:

How many items in PCE have an inflation rate exceeding 3%, calculated on an annualized basis over the past 6 months and 12 months respectively;

The second derivative of AI capital expenditure, that is, whether the growth rate of AI investment is accelerating or decelerating;

To observe the transmission of geopolitics to inflation, focus on the difference between the spot prices of commodities such as corn, soybeans, and wheat and the so-called "crack spread."

Among them, the first indicator may have already declined in August; the second indicator, in hindsight, may have peaked this year.

Of the three major indicators, the first leans toward inflation trends, the second toward economic growth and the investment cycle, and the third toward supply shocks and their inflation transmission. Warsh observes these three indicators in coordination as the main reference basis for economic conditions and inflation conditions.