Anthony Chan
Anthony Chan
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Inflationary pressures are starting to percolate --and the Federal Reserve is going to react to this.
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The average hourly earnings figures were truly the spoiler of this report, ... It tells us that the Fed may now have to start becoming more vigilant about upcoming price pressures.
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These numbers give the Fed license to cut rates as much as necessary.
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These numbers are suggesting that a future Federal Reserve tightening will be coming to a theater near you quite soon.
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These numbers are essentially telling us that retail sales were artificially boosted by zero-percent financing. These numbers are not going to do anything to discourage the Fed from thinking that the balance of risk in the economy is toward weakness.
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This is clearly a non-threatening report for investors and policy makers alike. Labor market conditions appear to be tepid enough to justify less rather than more Fed rate hikes while wage pressures did not spoil the party.
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The Federal Reserve and energy prices really have the fate of the economy in their hands.
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The Fed will raise rates, but they're aware that higher energy prices might do some of their job. And inflation is not so high that they need to panic.
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The core (inflation measure), while it's up, still looks very contained. This just keeps the Federal Reserve interest rate hike engine humming along after June 30.
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It lets the Fed feel more comfortable of raising only at a measured, and not an accelerated, pace,
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The Fed is likely to continue to raise rates for much of the year 2005.
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The Fed is justified in being aggressive. We're in uncharted waters here.
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The Fed is fully aware that a slowly recovering economy needs to be nursed carefully back to health before the doctor sends the patient home.
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What the Fed showed was that extraordinary circumstances require an extraordinary strategy. Not only are they moving rates to lows not seen since the early '60s, they're prepared to move them a lot lower.