Ethan Harris
Ethan Harris
advance clarity clear early expect fed iraq march means meeting move news quite seems ugly
The Fed has made it clear that it will take quite ugly news to get them to move in advance of any clarity around the Iraq situation. That means the March 18 meeting seems too early to expect a cut.
clearly consumer economy growth operating percent recovery talking
You're not talking about a full-blown business-cycle recovery here, which is something like 6 percent GDP growth for a year. To get that, you'll need the whole economy operating in full-growth mode, and clearly the consumer isn't.
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Clearly the new focus of Fed attention is the stock market. The Fed is not focused on many of the indicators equity analysts emphasize. Instead, the Fed's focus is on aggregate wealth creation in the market.
aggregate attention clearly creation equity fed focus focused stock wealth
Clearly the new focus of Fed attention is the stock market, ... The Fed is not focused on many of the indicators equity analysts emphasize. Instead, the Fed's focus is on aggregate wealth creation in the market.
clearly economy economy-and-economics inflation momentum plenty risk
Clearly the economy still has plenty of momentum with a little hint of inflation risk in the background.
clearly recovery
The idea that the recovery has started has been clearly confirmed. But there's no way to know the sustainability of the recovery.
budget china congress course gradual growth happen ideal less none percent pressure three works
In an ideal world, three simultaneous gradual adjustments would happen. The U.S. eliminates the budget deficit, China revalues by 30 percent and China works to rebalance growth more to consumption and less to exports. Of course none of this will happen and the pressure for protectionism from Congress grows.
friendly inflation major signals warning
It's not as friendly as some of the other inflation numbers, but it's just one indicator. We have no inflation warning signals from any of the other major inflation indicators.
erosion explosion question sudden
It's not a question of a sudden explosion in prices. It's more an erosion of the low-inflation psychology.
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Everyone is all zeroed in on the consumer now, but the truth is that the consumer isn't the driver now. Confidence is picking up, but still at average levels. Wage growth is slow and the bulk of the tax cut is already in place. Finally, with all the debt people have taken out over the past several years the burden of paying monthly bills is leaving less for discretionary spending.
bond looking market relief report
The bond market went into this report looking for disaster. I think there's a sense of relief in the bond market.
best cuts economy maintain move promise quarter rate remains
The best tack is to move by a quarter point, with the promise that there will be more cuts to come if the economy remains weak. You can't maintain that promise with big bulky rate cuts.
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The basic story of the consumer is that he's OK in the near term and at risk in the medium term.
adjustment economy effect fairly higher oil prices problem style top
The adjustment to higher prices has been fairly orderly. It's not a 70's style shock. Oil prices do have an effect on the economy but it's not dramatic. It's a problem but not at the top of the list.