Wayne Ayers
Wayne Ayers
causing changes clear cut helpful labor lower market rates structural true unclear
It's unclear what lower rates would do. If it's really true that productivity and structural changes are causing labor market weakness, it's not clear that another cut in rates would be helpful to the labor market.
confronted cut desired extended external financial global pat period rather shock stance stand time unless
I think their desired stance is to stand pat for an extended period of time rather than cut rates, unless they are confronted with an external shock to the global financial system.
alan cut greenspan guess inflation last point quarter rate seeing
I think (Fed Chairman) Alan Greenspan has made it all but official, we'll get another rate cut in June, but my guess is a quarter point rate cut, principally because of what we're seeing on the inflation report. The CPI and PPI have been trending up over the last two years.
business creating expect growth half labor market past permanent pickup second sustained until
The second half will show some better growth. Will that be sustained past the second half? For that, two things have to happen: we have to see a pickup in business spending, and the labor market has to stabilize and improve, creating permanent employment. We don't expect to see that until year-end.
bay businesses growth helps hire inflation slower
Productivity growth helps keep inflation at bay and allows real incomes to grow, but it makes businesses even slower to hire than usual.
corporate costs decline economy either labor prices profits rise wage
Productivity always slows as the economy slows. If labor and wage costs are still on the rise and productivity slows, either corporate profits decline or prices increase.
I think if you take those two things together, there is some hope.
anecdotal book confirm economic evidence reports seems
The anecdotal evidence of the beige book seems to confirm what all these economic reports have been saying.
agree forecasts
We'll probably have a moderate-paced recovery. I couldn't agree more with the Greenspan's forecasts that it would be a sub-par recovery.
call environment expect financial happen markets point stable view
From the Fed's point of view we've had head-fakes before -- I think they want to see a more stable environment for financial markets before they call it a day. I don't expect that's going to happen overnight. We will see a sustainable slowdown, but it may not happen right away.
across alan anyone areas best economy fearful greenspan guess happen insurance point policy running seen taking weakness
I don't think anyone has seen this happen so quickly. I don't think Alan Greenspan has seen it happen so quickly. So he's taking out an insurance policy for himself. My best guess is that they (The Fed) are running scared. At this point we've seen such pronounced weakness across all areas of the economy that I think they're fearful this downturn is going to be very different than any in the past.
almost biggest declines employment strange sure thinking
I find it strange that we had one of the biggest declines in employment in almost two years and no one noticed, and I'm sure they're thinking the same way over there at the Fed.
absent business cycle external hiring income increase increasing inventory length means support temporary week work
To me, the business cycle is working as it always does, absent an external shock. Inventory liquidation means firms have to increase production, and they're already doing that. They're also increasing the length of the work week and hiring temporary workers. All these things support income and spending.
bottom corporate directly good means news plus recovery spending
The good news is that this is going to go directly to the corporate bottom line. That's a real plus for profits, which means a real plus for corporate spending and the recovery going forward.