Right now there is a growing disconnect between what financial markets are pricing and what the actual economic data says.
Markets are pricing in rate cuts from both the Fed and the ECB within the next two quarters. But live CPI data from FRED still shows sticky services inflation above 4%, and Euro Area HICP from the ECB tells a similar story with core inflation plateauing rather than falling.
Meanwhile, labor markets on both sides of the Atlantic remain historically tight: US unemployment is below 4% and Eurostat shows the EU rate near record lows.
Central banks have almost never cut rates into labor markets this tight while inflation is still above target. When they have, it was usually under duress.
This is exactly the kind of disconnect that is worth quantifying instead of debating. EconLens can compare market rate expectations against live inflation and employment data in seconds, pulling from FRED, the ECB, and Eurostat and flagging where the numbers simply do not add up.
When positioning portfolios or making policy calls, it helps to know whether you are betting on the data or on sentiment.