Economic Jury

Jury duty is a civic responsibility where citizens are randomly selected to serve as jurors in legal trials.  Having served as a jury foreman about a decade ago, I can attest to the deliberative process Americans are fortunate to have when considering the facts of important moments in the lives of the parties involved in a case.  As of this writing, I just finished my day of jury duty after being on standby earlier in the week (calling in each night), which informs the following metaphor.

Monetary policy represents another form of deliberative decision-making.  Every six weeks, the Federal Open Market Committee (FOMC) gathers to examine the facts concerning the American economy.  On June 18th, they will announce their next verdict via the FOMC Announcement, followed by a press conference.  While Atlas has never been invited to weigh in on the merits of the case, that doesn’t stop us from having thoughts about the economy.

It’s important to view the state of the economy through the lens of the FOMC’s dual mandate.  This mandate was handed down to the central bank by Congress and ensures that interest rate policies support both stable inflation (something the FOMC defines as a 2.0 percent trend) and full employment.  Atlas has long felt these two goals are often at odds with one another, but that hasn’t changed the minds of the powers that be.  Currently, the inflation trend is at its lowest level since March 2021 when looking at the Core Personal Consumption Expenditures Price Index.  This comprehensive look at prices happens to be the Fed’s preferred price proxy and reached 2.5 percent as of April 2025 on a year-over-year basis.  Later this morning, we’ll get the May 2025 employment report from the Bureau of Labor Statistics, but as of this writing, the employment picture looks relatively healthy, having reached an all-time high, averaging 156,833 net new jobs each month to date since April 2024.

Just like a jury, individuals on the FOMC will weigh the evidence to the best of their ability, attempting to reach the correct verdict regarding the health of the American economy. Each voting member will have their own biases and understandings of how things are in their service region, but collectively they’ll determine if any changes should be made to the Fed’s monetary policy stance.  From the looks of it, there probably won’t be any surprises coming from their announcement, as the economy seems to be faring well with both inflation and employment falling within a range that suggests things are neither too hot nor cooling substantially.  This, of course, is conjecture from the gallery as we wait for the jury to finish deliberating and hand down their verdict on June 18th.