I think the surprise will be that housing prices and housing sales will decelerate, but the economy will do just fine. |
If we are right that both the pace of economic activity and corporate earnings are still fraught with near-term, downside risk, equity values and risk spreads will carry a recession uncertainty premium for some time -- a premium that the Fed will still want to counter. |
Investors on Wall Street are going to have to learn a lot about these new faces before they feel comfortable. I don't think this means any change in monetary policy but there are new people. |
It's a close call, a very close call. |
It's likely we got a decline in sales. We've had a drop in vehicle sales and it also looks like back-to-school was on the disappointing side. |
Oil shocks are a tax on growth, and this is no exception. None of us know how long this supply shock is going to last. |
Reading (the Fed) has been trivially easy over the past year and a half, compared to what's it's going to be. |
The balance of risks now suggests that the Fed is not likely to move to the sidelines until the funds rate reaches that level, |
The Fed truly wants to get inflation somewhat higher -- back into the comfort zone. Why not say where that comfort zone is? |
The fourth quarter is going to be very sluggish, indeed. We'll see some improvement in the first quarter, but it's a slow grind. |
The issue is does OPEC think the global economy is strong enough to withstand the change in price. It just so happens that the economies that are seeing the biggest price increases -- the United States and China -- are also the strongest. |
The key reason: Dwindling economic slack and escalating costs in the context of strong U.S. and global growth. |
The U.S. stock market is pricing in a hard landing, an acceleration of inflation and a Fed that may or may not come to the rescue. Part of that message is emanating from the bond market and part of it is coming from some thick smoke signals that the banks are sending. |
The underlying pace of the economy is strong. The fact that global growth is looking better will keep the economy strong through the balance of this year. |
The unemployment rate in the first quarter should have been at least 6.3 percent -- significantly higher than January-February's 5.75-percent average, |