Rory Robertson
Rory Robertson
cash critical dropped hands limit limiting mortgage rates rise sharp threatens
The sharp rise in mortgage rates that is now under way threatens to limit the refinancing boom, limiting the cash that will be dropped into U.S. consumers' hands during the critical holiday-shopping season.
couple deflation driving economic economy fed growing next pace prices service wage wages
The thing driving service prices is wage growth, and after two years of sub-par economic growth, we've got wages decelerating. If the Fed doesn't get the economy growing at an above-trend pace in the next couple of years, deflation will arise.
backed bargain consumers drop economy equity helped homes interest lower meant mortgage rates taking tap wealth
The thing that helped the economy so much was a drop in interest rates, which meant lower mortgage rates, which meant consumers have been able to tap the wealth in their homes by refinancing and taking equity out of their homes. With rates having backed up so sharply, refinancing is not such a bargain any more.
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.
skeptical time
I am skeptical that this time will be different.
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.
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.
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.
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.
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.
confidence definitely dip double early great month people saying shortage
It's too early to say with great confidence that things are definitely getting worse, but if we get another month or two of payrolls declines, there won't be any shortage of people saying a double dip has started.
bank door interest leaves official open raise rates rather reserve sooner
It leaves open the door for the Reserve Bank to raise official interest rates sooner rather than later.
gradual improvement painfully rate
There is a very gradual improvement, but the rate of improvement is painfully slow.
assumption bond economy fairly fed hike labor march might particular perception perhaps quite rates yields
There's a perception that the economy is actually doing quite well, in particular the labor market. It's a fairly straightforward assumption the Fed would want to hike rates in March and perhaps in May. You might see bond yields go higher.