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Posts Tagged ‘Labor Market’

Inflation - Difficult to Move, But Once Moving, Hard to Control

Three key measures of inflation have recently lurched across the Fed’s threshold of 2%. The recent pickup in gas prices is set to have an even sharper upward impact on the consumer price inflation basket. Inflation can really spin out of control very quickly. If it happens, it would happen very quickly. Inflation is like a supertanker: Hard to get moving. But once moving, hard to stop.

A Sept Rate Hike Is Not Even Close: Goldman's 7 Reasons Why Yellen Will Delay... Again

On one hand, every economist, virtual portfolio manager, Yahoo Finance Twitter expert & TV talking head is certain that a September rate hike is inevitable. On the other hand, the bank that runs the NY Fed, Goldman Sachs is doubling down on its call that the Fed will not hike in September. So here is Goldman’s Jan Hatzius with seven reasons why Yellen will delay. Again.

Payrolls Preview: Seasonal Bounce In Jobs But Wage Growth May Disappoint - Goldman

Recent data on wage growth have disappointed expectations. We think the Fed would take comfort from a pickup in wages, as the level of wage growth provides a useful cross-check on the amount of slack remaining in the labor market. Fundamentals argue for at least a modest improvement in wage growth in coming quarters, in our view. – Goldman.

The Fed Waited Too Long: Here Comes Inflation

This inflation surge is going to be led by wage inflation. By the time the Fed realize that the labor market is so tight that employers are voluntarily raising wages across the board it is far too late, you are officially behind the curve as the surge in wage inflation is signaling loud and clear. The Fed will have no choice but to raise rates fast.

3 Things Central Banks Will Do to “Save the Economy”

Central bank activism, stimulating credit creation with artificially low interest rates, only works when people see little risk of default or rising rates. But that risk cannot be ignored forever. Rising rates come around sooner or later; often ferociously. When that happens, central banks lose their ability to coax stocks higher with lower rates.

We’re in an Era of Central Bank Worship

On the subject of bond markets, “does it not seem incongruous to chase low-yielding fixed-income securities denominated in a currency that the central bank is vowing to inflate?” Why do you think that investors go into bonds despite the Fed’s intention to devalue them over time?

QE Ending Because It Was Successful? Then Here Are A Few Questions

Certainly, QE-induced perpetually rising asset prices & sinking volatility, likely boosted consumer confidence through the interpretation of lofty prices as ‘all must be well’. However, those aspects dangerously conspire to produce a false perception about the true state of economic fundamentals. Some simple questions need answers.

Jackson Hole: 'Tremendous' Downside Risks If Yellen Doesn't Go Full-Dovish

The 3 ways Yellen can be dovish. Full dovish goes beyond anything she has stated explicitly in her comments. Semi dovish may generate a strong initial market reaction if it looks as if it is introducing new factors into policy equation but is much more ambiguous. Contingent dovish is the argument she has put forward for a long time.

Hiring In The US Remains Far Below Pre-Recession Levels

While the US may have, somehow, recouped all of its post-recession job losses as was widely trumpeted everywhere on Friday, it sure didn’t achieve this courtesy of a vibrant hiring labor market. In fact, the pace of US hiring is still just about half of where it should be based on the pre-recession trends.

Why the U.S. Recovery is Such a Disappointment

We have had a disappointingly slow recovery, and our consistent expectations for a pickup in growth have been dashed over a number of years. This has been the most agonizing post-recession recovery since The Great Depression, in spite of record stimulus efforts including zero bound interest rates.

FOMC Minutes Confirms "Forecasts Overstate Rate Rise Pace"

The FOMC Minutes confirm, “SEVERAL FED OFFICIALS SAID FORECASTS OVERSTATED RATE RISE PACE” – In other words, we are way more dovish than you thought we were… Anyway, stocks love it as the Fed has just given the go ahead to reflate the bubble some more.

Goldman's 5 Key Questions For Janet Yellen

Fed Chair Janet Yellen is likely to stick to the script in her inaugural monetary policy testimony but Goldman looks for additional color on: 1) Recent patch of softer data 2) Fed’s thinking on EM weakness 3) Hurdle for stopping taper 4) Amount of slack in labor market 5) Future of forward guidance

Paul Singer

If the economy does not light up, the impact of another year of full-bore QE is impossible to predict. Five years and $4 trillion have created economic and moral distortions but very little sustainable value. Maybe the sixth year will produce the “riot point.” Nobody knows, including the Fed.

The Elusive Economic Recovery. The “Tide of Cheap Money”

What is remarkable is that this setback to recovery has occurred even in the midst of a period when the “tide of cheap money,” to use an expression of the Financial Times in the context of “quantitative easing,” “is lifting all boats.”

Why the Fed Won’t Start Taper in the December FOMC Meeting

Factors mentioned here suggest another non-taper in December. If we’re right, the spotlight on January’s FOMC meeting – which already features Ben Bernanke’s exit, Janet Yellen’s new role and a new set of voters – will be even brighter.

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