Macro Mix - The Fed’s Stuck

US Cross-sectional Macro Analysis

Markets have spent most of this cycle trying to price the first cut.

But the latest data makes that harder.

The macro mix is no longer a clean growth is slowing, inflation is cooling, the Fed can ease setup. Instead, we now have something more uncomfortable: inflation is heating back up, real earnings are rolling over, and the labor market is cooling but not cracking.

April CPI was the catalyst. Headline CPI rose 0.6% MoM and 3.8% YoY, while core CPI rose 0.4% MoM and 2.8% YoY. Energy did a lot of the damage, but the pressure was not limited to energy: shelter rose again, services inflation remained sticky, and the all-items-less-food-and-energy index accelerated from the prior two months.

At the same time, real earnings have flipped negative. Real average hourly earnings fell 0.3% YoY, while real average weekly earnings fell 0.2% YoY from April 2025 to April 2026. That is the squeeze, workers are still getting nominal wage gains, but inflation is eating them.

Below the fold, I walk through the 12 indicators that matter most for the Fed, inflation, expectations, labor, wages, consumption, housing, credit, and financial conditions and why the conclusion is not “cuts are coming.”

It is closer to….

The Fed is stuck in a hawkish hold.

Worth a watch:

Subscribe to get high quality research and access to a high quality website with bespoke models and rates curves for G6.