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Chandler economists tell San Clemente advisory panel core inflation, not headlines, will guide Fed bets
Summary
Chandler advisors presented an economic briefing to the Investment Advisory Committee, saying employment is stable while headline inflation swings tied to international events should be ignored in favor of core measures; the firm proposed limited portfolio changes such as adding TIPS for inflation protection.
Chandler representatives presented a market outlook to the San Clemente Investment Advisory Committee on April 27, saying employment is holding steady while headline inflation swings tied to international conflict are masking the picture the Federal Reserve will watch.
Carl Meng, an economic advisor with Chandler, said the labor market appears stable and pointed to a 4.2% unemployment rate, adding that "we're just gonna be like the Fed, and we're gonna throw out those headline measures and just focus on core." He warned that headline CPI and PCE prints can spike with short-term crude-price moves but that core measures will drive policy decisions.
Jason, Chandler's representative to the committee, said Chandler expects the Fed to focus on core inflation and indicated markets are pricing a possible September rate move, but noted that breakevens suggest investors are not broadly pricing long-run inflation. "If the core measures stay relatively behaved, we think the Federal Reserve will not be making any adjustments to the Fed funds rate for the remainder of 2026," Jason said.
Chandler also discussed growth and bond-market dynamics: Meng cited an Atlanta Fed GDPNow estimate that showed strong third-quarter real GDP forecasts and said the investment case for duration management and careful credit selection had strengthened as yields moved higher since March.
The presentation set the stage for later portfolio conversations about adding modest allocations intended to protect against inflation and improving yield while maintaining safety and liquidity.
The committee did not take immediate action on the economic recommendations; staff said Chandler would return with specific allocation proposals and legal checks on California code constraints.
