The Data Doesn't Lie

A brutally honest take on markets, money, and the machines that move them

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Thursday, August 29th: The Fed's Favorite Number Just Whispered Sweet Nothings

Here's what happened while you were probably checking your phone for the dozenth time today: July PCE prices dropped this morning, and suddenly every inflation hawk in America started cooing like doves.

The Personal Consumption Expenditures index—the Fed's darling metric that makes Jerome Powell's heart skip beats—came in exactly where the data nerds expected it. Core PCE held steady, monthly readings behaved, and the annual change sits at 2.6 percent as of June. Nothing shocking. Nothing revolutionary.

So why does this feel like watching paint dry on a house you'll never afford?

Because we're living through the most choreographed monetary policy dance in modern history. Every data point gets dissected by algorithms before human eyeballs even see the numbers. The S&P 500 climbed to 6490 points yesterday, up 0.13%—barely a rounding error, yet treated like gospel by the commentary machine.

The real story isn't in today's PCE print. It's in the eerie calm that's settled over markets while Trump pushes to remove Fed Governor Lisa Cook, stoking concerns about central bank independence. Markets shrugged off this direct assault on Fed autonomy like it was just another Thursday.

Think about that for a moment. Political interference with monetary policy—the kind of thing that used to send bond vigilantes into hysterics—barely moved the needle. Either markets have become completely numb to institutional erosion, or they've priced in a future where Fed independence was always an illusion anyway.

Meanwhile, earnings from Dell, Marvell Technology, Autodesk, and others reminded us that beneath all the macro theater, companies still have to make money the old-fashioned way. DELL shares moved. MRVL reacted to semiconductor reality. The earnings machine grinds on, indifferent to Fed politics and PCE decimal points.

But here's the part that should make you uncomfortable: The Nasdaq fell 0.22% earlier this week while the AI boom "remains robust"—according to the cheerleaders, anyway. Robust how, exactly? Because the same stocks that carried us to these heights are starting to show cracks in their growth narratives.

The disconnect is profound. We're celebrating inflation data that confirms we're exactly where we thought we'd be, while ignoring the structural shifts happening underneath. Central bank independence under attack? Shrug. AI valuations stretched beyond any reasonable metric? Buy the dip.

The dollar fell and longer-dated Treasury yields rose when the Cook story broke. That's your bond market telling you something important: long-term inflation expectations aren't as anchored as the Fed thinks they are.

But go ahead, keep watching the PCE readings like tea leaves. The real money is being made by people who understand that in a world where monetary policy becomes political theater, the old rules don't apply anymore.

Tomorrow brings more data, more earnings, more carefully crafted Fed-speak. The dance continues. The music plays on.

Just don't mistake the choreography for actual dancing.

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Next week: Why the University of Michigan sentiment numbers matter less than your barista's mood, and what Dell's guidance really tells us about the AI infrastructure build-out.

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The Data Doesn't Lie is written by someone who remembers when Fed independence actually meant something. Subscribe for more uncomfortable truths about markets, money, and the slow-motion collapse of everything you thought you knew about finance.