Brian Bethune
Brian Bethune
basically hike rate
They're basically signaling, 'Expect one more rate hike here' and that's what we are basically expecting.
aware budget check deficit doctor gaining interest lose rates slow sudden tells until
The budget deficit is like gaining weight. You are not really aware of it until at some point, all of a sudden you can't do what you want to do because you are heavier. Interest rates go up and slow things down. Then you go to your check up and the doctor tells you you got to lose 25 pounds.
activity early economy forward growth line output overall overseas picked quarter second sector solid strong stronger underlying
Activity in the manufacturing sector picked up early in the second quarter, in line with strong underlying fundamentals in the economy and stronger overseas demand. We can look forward to solid overall output growth in the second quarter of 2006.
bias companies demand higher intact quarter raise rates second strong toward
Demand is strong enough for companies to raise prices. This will keep the Fed's bias toward higher rates intact through the second quarter of 2006.
ahead capital cyclical demand europe expected firm gaining goods japan markets months overseas remain
Demand for capital goods in overseas markets is expected to remain firm in the months ahead as cyclical recoveries in Europe and Japan are gaining momentum.
continues demand domestic energy external situation sources supply terms
There is an imbalance in terms of the demand and supply of energy which continues to be satisfied, or is increasingly satisfied, by external sources of energy products. Now we have a situation that has been every more complicated because of a domestic supply shock.
europe gaining growth japan provide
Recoveries in Europe and Japan are gaining momentum. This should provide the underpinnings for respectable growth in exports.
impressive industries kicked quarter second services
Services industries kicked off the second quarter with very impressive momentum.
coming existing following northeast peaked sales september
Existing sales peaked nationally back in September and have been coming down. The Northeast is following that pattern.
fed quite response robotic start sudden
The Fed has been kind of on autopilot here for quite a while, ... Now all of a sudden they're going to have to start doing some work. I don't think a robotic response is appropriate here.
borrowing demand driven early expectation higher housing interest line towards translate ultimately
This is in line with our expectation that demand for new housing would 'cool off' towards the end of 2005 and in early 2006 as higher short-term interest rates, driven by the Fed, would ultimately translate into higher long-term borrowing rates.
cut flow housing increasing meet people prices respond retirement save stock
If housing and stock prices go down, people will respond by increasing the flow of savings. If they have to save more to meet retirement objectives, then they'll have to cut down on consumption.
definitely flag generally goes percent red yellow
Generally speaking, when it is over 75 percent of GDP, then the yellow flag goes out. I would say 95 percent of GDP and over is definitely a red flag.
additional attractive clearly economic growth side terms
In terms of economic growth, the fundamentals are clearly on the side of the U.S.. We don't think there's going to be a lot of additional momentum, but even if (the dollar) treads water, it's still going to be an attractive investment.