Wayne Ayers
Wayne Ayers
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.
apt close consumer consumers deflation expect japanese nowhere prices spiral
We're nowhere close to the Japanese example. When you have real deflation as they have in Japan, consumers expect prices to be lower, and they defer purchases, which makes the spiral worse. That's not an apt description of what the American consumer has been doing.
convincing early expect half improvement indicate labor market neutral next numbers production risks second suspect
I suspect they will not have a neutral bias; they will indicate risks are on the downside. I think we will, on the production side, see better numbers in the second half of this year, but I don't expect any convincing improvement in the labor market before early next year.
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.
bond close expectation few given lows rebound recent sharp
You can't read too much into any one number, but it's a sharp rebound from the lows of October. Given that and a few other things, the bond market's more recent expectation is that the Fed, if it's not finished, is close to being finished.
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.
below capital continued cost equipment good improve invest past reason technology year
Firms in the past year have continued to invest in equipment and technology to improve productivity. And with good reason -- the cost of capital is below the cost of labor.
couple experience given goods maintain market past terms
Firms are still pretty cautious, given the experience of the past couple of years. But if firms are going to maintain market share, they will have to be competitive in terms of the goods they offer.
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.
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.
came consumers hanging higher robust showing
It came in a little higher than expected, but I take it as more of the same -- consumers are hanging in, but they're not showing robust enthusiasm.
anyone decline genuine
It is a genuine shocker... I don't think anyone anticipated a decline of this magnitude.