Tom Sosnoff: Fed can't cut now

Tom Sosnoff’s point is pretty simple — the Fed does not usually cut rates when inflation is still running hot and the labor market is still standing up. That argument got fresher on May 8 and May 9, when new labor data and market commentary both pushed in the same direction. (youtube.com) April payrolls came in better than expected, unemployment held steady, and inflation was still sitting far above the Fed’s 2% goal. (bls.gov) So this is less a spicy hot take than a fight over what the data means now. Sosnoff is saying the Fed would look premature — maybe even reckless — if it started easing into an economy that still has sticky price pressure. (bloomberg.com) That matters because traders keep trying to price the first cut, and every strong jobs or inflation print shoves that timing around. ### What did Sosnoff actually argue? In the YouTube clip, Sosnoff’s core claim is that the Fed “can’t cut rates right now” because the setup does not justify emergency help or even routine easing. The backdrop is a market that keeps looking for relief while the macro numbers keep refusing to cooperate. (bls.gov) ### Why does the jobs report matter so much? Because rate cuts are easiest to defend when the labor market is cracking. But April payrolls rose by 115,000, which was down from March yet still ahead of consensus forecasts, and the unemployment rate stayed at 4.3%. That is not a booming jobs market — but it is stable enough that the Fed can argue there is no urgent need to cushion employment. (youtube.com) ### What is inflation saying? Inflation is the bigger problem. March CPI rose 0.9% on the month and 3.3% from a year earlier. Core inflation was cooler than headline, but the broad message was still bad for anyone hoping for quick cuts — price pressure moved farther away from the Fed’s target, not closer. (youtube.com) ### Why would a cut look awkward here? Because the Fed’s job is two-sided — maximum employment and stable prices. If unemployment were surging, officials could justify easing even with inflation still uncomfortable. But when jobs are merely slowing and inflation is still elevated, a cut starts to look like the Fed is choosing market comfort over price stability. (bls.gov) That is basically Sosnoff’s complaint. ### Is the market moving his way? Broadly, yes. The tone around the Fed has turned more hawkish over the last few days. One major Wall Street shift on May 9 pushed expected Fed cuts back to December 2026 and March 2027, and other market commentary has framed the central bank as running out of reasons to ease soon. (bls.gov) ### Does that mean cuts are off the table? No — just not easy to justify right now. If growth rolls over, unemployment jumps, or inflation cools sharply, the picture changes fast. But as of May 9, 2026, the latest public data says the economy is not weak enough and inflation is not tame enough to make a near-term cut feel natural. (federalreserve.gov) ### Why do traders care so much? Because rate timing hits almost everything — Treasury yields, growth stocks, bank shares, options pricing, and the whole “risk-on” mood. A delayed first cut can reprice those bets in a hurry. Sosnoff’s argument lands because it lines up with the numbers traders just got, not because it is especially exotic. (bloomberg.com) ### Bottom line? Sosnoff is saying the Fed should act like the data it has, not the slowdown markets keep hoping for. Right now, that data still says “hold.” (youtube.com) (bls.gov)