InternationalMarkets & Economy

Outside the Fed, anxiety-ridden birds have begun to pluck out their own feathers

After today’s employment report, the Fed is a united hawk-nest
  • Last week, I described the Fed divided into three groups: hawks, doves and undecided.
  • After today’s employment report, the Fed is a united hawk-nest, and outside the Fed, anxiety-ridden birds have begun to pluck out their own feathers.
  • The only anxiety refuge from today’s report of October payrolls: dim hope that it’s an outlier.

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Last week, I described the Fed divided into three groups: hawks, doves and undecided. After today’s employment report, the Fed is a united hawk-nest, and outside the Fed, anxiety-ridden birds have begun to pluck out their own feathers. Like me. The only anxiety refuge from today’s report of October payrolls: dim hope that it’s an outlier. Nearly double the job and hourly-wage forecasts, dim indeed. The Fed will bump the cost of money by 0.25 percent soon -- whether in December or in winter is immaterial. From that baked cake forward...it’s always a bad idea to predict things. The useful approach is to bracket future probabilities, assessing a range of outcomes. Sometimes the forward range is a narrow cone, as it has been for several years. If economic conditions hold the Fed’s overnight cost of money at zero, then longer-term rates stay anchored. Beginning now the future is as wide a cone as you’ll ever see, but we can still identify the determining...