Ethan Harris
Ethan Harris
closely dictionary figure general hold keeping keeps language less rates sounds study though tone
They keep fiddling with the language, and the general tone of the directive keeps getting a little less dovish. Being 'patient' sounds a little less like they're keeping rates on hold than a 'considerable period' -- though you'd need to study a dictionary closely to figure that out.
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.
economy except fed future hike learned near policy rates ready
In total, we learned very little about the future of the economy or Fed policy except that the Fed is not ready to hike rates in the very near future.
early interest rates recovery rising talking
By talking about interest rates rising again, you can precipitate them rising too early in a recovery -- that's why he shouldn't be talking about it.
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.
chance cut fed four gone hold might months period rates reasonable sitting
We've gone from a period where there was a reasonable chance the Fed might cut rates just four months ago to one in which the Fed is very much comfortably just sitting on hold for now.
declaring doctor equivalent fed forcing full hike hospital patient rates run
For the Fed to hike rates now would be the equivalent of a doctor prematurely declaring a patient at full health, discharging them from the hospital and then forcing them to run a mile.
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.
average bills bulk burden confidence consumer cut debt driver growth leaving less past paying people picking several slow taken tax truth wage
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.
basic consumer medium near ok risk term
The basic story of the consumer is that he's OK in the near term and at risk in the medium term.