Ethan Harris
Ethan Harris
fed market
If the Fed isn't happy, the market isn't happy.
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.
against central err feeling restraint side
Our feeling is that because you have a new central banker, they are going to want to err on the side of restraint against inflation.
adjusted bring consumer impact rates rising slowing spending tremendous
Rising rates could have a tremendous impact on slowing consumer spending. Consumer spending has been about 6 percent, when adjusted for inflation. Rising rates could bring it down to 2 or 3 percent.
almost convince inflation last straw
I think that (high inflation readings) would be almost the last straw to convince the Fed.
bills both economy hitting immediate impact moderate oil process recent shock slowing spending though value waiting winter
I think the economy is already in the process of slowing to a more moderate pace. Oil has both an immediate impact on spending and lagging impacts. Even though oil has stabilized in recent weeks, we still have to play out effects. We're still waiting for the shock value of the winter heating bills hitting people.
data dictate economy further gradual inflation markets risks step stop strong towards
It is gradual step towards a little more flexibility. Inflation, the economy and the markets will dictate how much further they go. They say the economy is strong and that inflation risks are tilted a little to the upside. There is nothing yet in the data that will stop the Fed.
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.
almost changed commentary fed identical officials people prior sound
I think what people will see is that commentary from Fed officials will sound almost identical to their commentary prior to this meeting. Nothing's really changed at the Fed.
adds case cautious demanding generally higher investors returns risk taking view
It generally just adds to the case for investors taking a little more cautious view on risk and demanding higher returns on investments.
background both bush business economic fed history itself list people pick seem
There is a history both in appointments under the Bush administration and the Fed chairmanship itself of people off the list being picked. Bush does seem to have a proclivity to pick people with a more business background for his economic positions.
carry consumer economy financial improvement labor looks market terms trying view whether worries
We've been trying to see whether the improvement of the economy and financial market will carry the day in terms of consumer confidence, or if worries about labor will dominate. It looks like the 'glass-half-full' view is winning.
below relief sigh whisper
Payrolls were well below the whisper number, so there's been a big sigh of relief in the market,