John Silvia
John Silvia
alone both breaking businesses cause certain changes continue energy fed fight high interest point price psychology raise rates
I think if you had $70 oil, and the Fed were to continue to raise interest rates to fight inflation, that could cause a problem, ... I think there's a certain breaking point where that the price of energy alone is so high that it changes the psychology of both businesses and consumers. I think $80 would probably break the back.
ask difficult fed inflation low point question risen seeing trend
What you're seeing is that inflation is rising, ... It's still at a low level, but you know what the trend is. The question to ask is, How much is too much? At what point does the Fed say it's risen enough that we don't want it to go any higher? That's the difficult question to answer.
behind bond fed market move neutral react risk
If they don't move to a neutral position, the bond market will react negatively. If the Fed sits there and reiterates the same risk on inflation, the bond market is going to look at this and say the Fed is way behind the curve.
argument bias bit capacity careful excess fed inflation longer upside
You can no longer make the argument that there is a lot of excess capacity out there. The bias on inflation is a little bit to the upside and the Fed has to be careful about that.
fed giving labor market means next reason several sit slack tight
That means there is even more slack in the labor market than we had previously thought, giving the Fed even more reason to sit tight for the next several months.
corporate fed good news
It's good news for the economy, it's good news for the Fed and it's good news for corporate profits,
allow confidence data employment federal funds increase measure provides reserve taken
Taken together, all this employment data provides the Federal Reserve with a measure of confidence to allow an increase in the funds rate,
change difficult fed goal market point pursuing raising sell
I think the market may sell off if there's no change in statement, ... It'll still be in the same difficult position, and it'll be disappointed that at this point the Fed is still pursuing goal of raising rates.
fed follow jobs reactive
They (the Fed governors) are going to follow the jobs report. They're not going to be proactive. They're going to be reactive to the data,
decision driven fed
That's going to be driven by the decision making of the new Fed chairman.
consensus fed goes neutral position
I would say the consensus is that the Fed goes to a neutral position on inflation.
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I suspect that there's a little optimism that the Fed will signal that they are just about done, that they'll change their language from saying 'further policy firming may be' to saying it 'might be' needed.
ahead bullet fed good increases inflation market meetings next number payroll
The Fed is going to look at this number and go full-steam ahead with 25-basis-point increases at its next two meetings to keep inflation in check, ... This is a pretty good payroll number for September. The market dodged a bullet with this report.
bond continue discount fed gains growth higher inflation interest modest raises rates remain rise short traders trend
Inflation gains remain modest but they are gains. This suggests that interest rates will continue to rise as the Fed raises rates at the short end and bond traders discount trend growth and higher inflation at the long end.