Mark Zandi
Mark Zandi
Mark Zandi is chief economist of Moody's Analytics, where he directs economic research. He is co-founder of Economy.com, which was acquired by Moody's Analytics in 2005. Prior to founding Economy.com, Zandi was a regional economist at Chase Econometrics...
NationalityAmerican
ProfessionEconomist
CountryUnited States of America
policy tricky
So far, it's weakening, not caving. But it's been a tricky policy to deflate housing, not crater it.
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They don't have Greenspan's practical edge to them, but they all have academic and government policy experience. I hesitate to say they won't live up to Greenspan, but that would be hoping for an awful lot.
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This Administration is trying to change the whole intellectual basis for fiscal policy that Alan Greenspan enforced when deficits were large in the early 1990s. We got fiscal discipline through the idea that deficits matter. That's been flipped on its head.
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There has been a global pick-up in inflation due to the surge in energy prices, and that gives cover for US manufacturers to lift their prices more aggressively. Central banks across the globe are tightening policy in fears that the surge in energy prices will infect inflation more broadly.
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If protectionist sentiment boils over, that could be a precipitating factor for the dollar. In a dollar crash scenario, it puts the Fed in a particularly difficult spot. Do they tighten policy (raise interest rates) to attract global capital or do they loosen it to help support the economy?
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We're getting job creation in healthcare and educational services. We've been getting that all along. It's demographically driven, it's funded by the government, and that's held up.
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We're back on track after the ill effects of the hurricanes. But it is also fair to conclude that global competition and corporate layoffs are weighing on job growth.
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Ultimately, if you err on the side of being dovish it will only come with more pain from slower growth. The hit to growth would be more substantial from higher inflation than from interest rate hikes.
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The potential for even higher energy prices is a risk to the economic outlook. The economy has digested the higher prices gracefully so far. But it can get a bit of indigestion if prices move higher.
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We are a very low-cost area in a very high-cost region. Housing values have risen here, but not nearly as much as in other parts of the country.
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Workers are asking for bigger pay increases and they are getting them. The pendulum has swung decidedly in favor of workers.
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This suggests that the economy has largely shrugged off the ill effects of the hurricanes. Christmas will turn out better than expected.
bond market rates
Reintroducing a little uncertainty in the bond market would be desirable. Long-term rates are too low,
became cautious consumers deficit economy energy growth higher indicate quarter second trade weighed
It does indicate that the second quarter was a disappointing quarter, ... Growth slowed sharply. Consumers became more cautious and our trade deficit ballooned. The economy was weighed down by higher energy prices.