Rory Robertson
Rory Robertson
core fed full gains inflation level lost lower lowest means measure payroll percent preferred progress requires run since six towards
Unemployment at 6 percent means the Fed has just lost six full years of progress towards lower unemployment in just six quarters. With its preferred measure of core inflation at the lowest level since the 1960s, the Fed probably requires a run of monthly payroll gains of 150,000 to 200,000 before it will feel any real need to tighten.
core cut economy fed forced front further inflation issue jobs likely ongoing people rates skeptical talking terrific ultimately
The Fed ultimately will be forced to cut rates further because we have had this ongoing issue of sub-par growth, disappointment on the jobs front and core inflation edging lower. People are talking about a terrific snap-back in the economy after the war, but I'm skeptical we're likely to see it.
beyond clear inflation minimal percent players pressures value year
It's very clear that there's minimal inflation pressures in the U.S. beyond the oil-price pressures. A lot of fundamental players will see value in the 10- year Treasuries at 4.8 percent levels.
bond breeding domestic fact gross inflation low market modest people pressure prints product quite steady weight
If gross domestic product prints 2.75 or 3 percent, it's broadly where the market is. People put very little weight on the fact that any pressure on inflation in the U.S. is quite modest and that's breeding low and steady bond yields.
current edge energy fed helps imagine inflation intense investors less pressure prices reduce risk seeing value worried
The inflation risk is less intense than many would imagine and, as energy prices edge lower, some investors are seeing value at current yields. It helps reduce the pressure the Fed has been worried about.
anxious bit clearly conditions dramatic fed financial quite rebound six weeks yields
Financial conditions clearly are quite a bit tighter than they were six weeks ago. I'd be dumbfounded if the Fed was not anxious about this dramatic rebound in yields dampening the rebound in the pipeline.
factors maintained means next number several
This number doesn't tell us much at all -- the seasonal factors are all over the shop. It only means something if it's maintained over the next several weeks.
assumption bond continue entering fact fall falling next people possible recession recovery stock stronger watching year yields
If we hadn't had a recession a year ago, and we were watching the fall in employment, a stalling manufacturing sector, falling bond yields and falling stock prices, many people would think we were entering a recession. There's an assumption that the recovery will continue and get stronger next year, when in fact it's possible the economy's tipping over again.
skeptical time
I am skeptical that this time will be different.
ball clear core far rise rolling toward
Obviously, a big rise in the core CPI would get the ball rolling toward another hike, but it's far from clear that will be the outcome.
downside market risk yield
Just as the market overshot on the downside in yield in May/June, the risk is that it now overshoots on the upside.
falling feed giving helpful lower oil prices quite rising stimulus terms
Rising oil prices are quite unhelpful, and falling prices are quite helpful in terms of giving stimulus to the economy. Lower prices feed through pretty well to everyone immediately.
basis fed points reflect statement worried
I think it's going to be 50 basis points because the Fed is worried about the economy, and I think the accompanying statement will reflect that.
economy happened mention past rates seven
I think the back-up in rates should rate a mention -- it's the most significant thing that's happened to the economy in the past seven weeks.