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The December CPI report had been overblown, like everything it seems these days. The headline numbers were as expected. The Consumer Price Index decli
[See the full post at: US Consumer Services Inflation Still Rising, 7.5% in December from 7.2% in November]Comments from the St Louis Fed President
US households still remain flush, should support consumption
Looks like we have above-trend growth in Q4
Better global prospects than just a few weeks ago
It’s hard to see how unemployment is going to go up, the labor market is strong
We need to avoid a repeat of the 1970s, must maintain rates at high enough levels to make sure inflation
Inflation
Inflation is defined as a quantitative measure of the rate in which the average price level o…Read this Term
moves down
Something north of 5% is the lowest level the Fed could use to credibly restrict inflation
Today’s CPI data was encouraging that we are heading in the right direction
There’s possibly too much optimism that inflation will come easily back to 2%
Most likely scenario is that inflation will remain above 2% so policy rate will need to stay higher for longer
We are really moving into an era of higher nominal interest rates for quite a while in order to get inflation back to target
Prospects for a soft landing have increased
Rates will have to stay higher for longer to avoid repeat of 1970s
I like frontloading policy
I dont see purpose of dragging things outFed’s Harker:
Eye-popping inflation numbers now likely in the rearview mirror
Doesn’t see recession but GDP should slow to 1% this year
Time of supersized hikes has passed
Remains concerned about commercial real estate
Unemployment likely to tick up to 4.5% this year from 3.5% currently
Unemployment then likely to fall back to 4.0% in 2024
Labor market in excellent shape“We will raise rates a few more times this year, though, to my mind, the days of us raising them 75 basis points at a time have surely passed…hikes of 25 bps will be appropriate going forward.”
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