🎙️ podcast Analysis • December 12, 2025 • Thoughts on the Market by Morgan Stanley

The Hidden Labor Crisis: Why Fed Officials See Job Losses the Market Doesn't

Fixed Income Currency Markets
Conviction LOW
Risk Profile 2.0/10 (MODERATE RISK)
Horizon 6-12 months
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Executive Summary

Morgan Stanley's Chief US Economist reveals a striking disconnect between official employment data and underlying labor market reality. The economy may already be shedding 20,000 jobs monthly after accounting for benchmark revisions, yet unemployment remains stable - a phenomenon Fed Chair Powell calls 'really curious.' This hidden weakness, combined with transitory tariff inflation peaking in Q1 2026, creates a compelling case for continued Fed accommodation. The central bank has explicitly rul...

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