Richard Berner
Richard Berner
ensure fed inflation move perhaps promptly require risks stay upside
Upside inflation risks may require that the Fed move promptly and perhaps a little more forcefully to ensure that inflation and inflation expectations stay low.
expect fed federal funds increase rate rather september stop
We now expect the Fed to increase the federal funds rate to 5.25% by September rather than stop at 5%.
activity both carry corporate downside earnings economic equity fed pace premium recession risk time values
If we are right that both the pace of economic activity and corporate earnings are still fraught with near-term, downside risk, equity values and risk spreads will carry a recession uncertainty premium for some time -- a premium that the Fed will still want to counter.
believe contain fed further future inflation move
We believe the Fed will move further to contain future inflation risks.
comfort fed higher inflation somewhat truly wants zone
The Fed truly wants to get inflation somewhat higher -- back into the comfort zone. Why not say where that comfort zone is?
balance fed funds likely move rate reaches risks sidelines until
The balance of risks now suggests that the Fed is not likely to move to the sidelines until the funds rate reaches that level,
banks bond coming fed hard inflation market message pricing signals smoke stock thick
The U.S. stock market is pricing in a hard landing, an acceleration of inflation and a Fed that may or may not come to the rescue. Part of that message is emanating from the bond market and part of it is coming from some thick smoke signals that the banks are sending.
downside fed inflation low makers policy risks seen statement sure
Fed policy makers made a statement that they want to really underpin the recovery. They've seen the downside risks and they want to make sure that low inflation and disinflation does not morph into deflation.
crude farms hold people price tank
Why should people hold crude in tank farms if they think the price is going to come down?
bust contribute courtesy crash home past reduced values wave
I don't think home values will crash -- they will rust, not bust. Demographics have underpinned demand, courtesy of a wave of immigration in the past 16 years that reduced supply, and you don't see the speculative overhang that could contribute to a bust in home values.
both economic effects mean rather seem sides
Both sides seem to be pretty well entrenched in their positions, which would mean the economic effects could be rather appreciable.
believes consistent current policy price
Certainly, current policy is ultra-accommodative and no policy-maker believes that it is consistent with price stability,
companies costs cut effort eliminate excesses force hiring jobs million overboard work
I still see that companies went overboard in slashing their work force in an effort to cut costs and to eliminate the hiring excesses of the 1990s. I think we have a shortfall of about 1.8 million jobs to make up.
economy economy-and-economics housing prices sales surprise
I think the surprise will be that housing prices and housing sales will decelerate, but the economy will do just fine.