Ethan Harris
Ethan Harris
attitude economy happened screw state trying
What's happened between now and then is that we've accomplished everything we've set out to achieve, ... Then they were trying to get the economy to the state it is in now, so the attitude now is, 'lets not screw anything up.'
aggregate along bias break consumer demand expect fed few growth inflation leave prices rates remains signs statements upside vote
With few signs that consumer prices are about to break to the upside ... along with signs that aggregate demand remains robust, we expect the Fed will not only vote to keep rates constant, but will leave the growth and inflation bias statements unchanged.
coming growth next wage
We are going to get some follow-through, some hiring, but it will be slow. I don't see wage growth coming back in the next year.
economy knew obviously revise weak
Obviously we have a pretty weak economy and this was not unexpected. We knew they were going to have to revise it downward.
according almost appetite deficit dollar dramatic drop growth improve incredible major movements reason sustained trade weak
Only with very weak U.S. growth or a major drop in the U.S. dollar will the trade deficit improve on a sustained basis. The reason you need these dramatic movements is that the U.S. has, according to almost every study, an incredible appetite for imports.
case economy functions good help quite
If we have an economy that functions O.K., with a little help from the Fed, in that case gridlock is quite good for the market,
corporate imagine interested lend load pay reasonable safe sector seen
Imagine you're a bank. The corporate sector isn't interested in borrowing, so you can't lend to it. So where do you go? Well, mortgages. They pay a reasonable rate. They're seen as a safe investment. Load up on mortgage-backed securities.
closing gradual industries job losses process seems since
More and more of the job losses are in industries that are effectively closing down domestically. This has been a gradual process since the 1950s, but it seems to have accelerated.
entering uncertain
Now you are entering a much more uncertain period.
capacity concerned economic excess fed growth needed percent quarter rid third
We needed 20 percent economic growth in the third quarter to get rid of all of the excess capacity in the economy. The Fed is still going to be concerned about disinflation.
assuming bond fed gets hikes market pulled
What we're assuming is that as the Fed hikes rates, the bond market gets pulled along.
below model point reached trust
We reached the point where we don't trust our model anymore. That's why we were below the consensus.
below relief sigh whisper
Payrolls were well below the whisper number, so there's been a big sigh of relief in the market,
corporate force growth holding line matter profit profits recent seen slow stay work workers
I think we know corporate profit growth can't stay at the rate we've seen in recent quarters. They (employers) have been squeezing the work force pretty aggressively, squeezing productivity out of workers and holding the line on wages. It's a matter of how much corporate profits slow down.