2018-02-07 06:38:00 Wed ET
federal reserve monetary policy treasury dollar employment inflation interest rate exchange rate macrofinance recession systemic risk economic growth central bank fomc greenback forward guidance euro capital global financial cycle credit cycle yield curve
The new Fed chairman Jerome Powell faces a new challenge in the form of both core CPI and CPI inflation rate hikes toward 1.8%-2.1% year-over-year with strong wage growth. The recent greenback depreciation aggravates inflationary concerns as non-farm payroll unemployment declines toward 4% or even 3.9%. This dollar depreciation raises U.S. import prices and therefore can drive greater inflationary momentum. More substantive evidence can shine new light on whether the current Trump stock market rally indicates irrational exuberance for most stock and bond investors.
The Federal Reserve can raise the interest rate to better balance the dual mandate of both price stability and maximum employment. Powell needs to weigh the pros and cons of another interest rate hike that constrains money supply growth near full employment. Price stability helps reduce economic policy uncertainty that may inadvertently dampen both consumption and capital investment decisions. On the other hand, Powell should pick the low-hanging fruits of full employment before America experiences the next gradual deterioration in labor market conditions. During the Trump administration, it takes 3%-3.5% real GDP economic growth for macro momentum to trickle down to the typical U.S. household, firm, and financial intermediary. Supply-side Trumpism needs to prove its feasible case in due course.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2018-02-11 07:30:00 Sunday ET
President Trump unveils his ambitious $1.5 trillion public infrastructure plan. Trump proposes offering $100 billion in federal incentives to encourage stat
2019-08-01 11:33:00 Thursday ET
Many young and mid-career Americans fall into the financial distress trap in rural communities. A recent analysis of 25,800 zip codes for 99% of the U.S. po
2019-08-28 14:46:00 Wednesday ET
Santa-Barbara political economy professor Benjamin Cohen proposes new fiscal stimulus to complement the current low-interest-rate monetary policy. Cohen fin
2020-05-14 12:35:00 Thursday ET
Disruptive innovators can better compete against luck by figuring out why customers hire products and services to accomplish jobs. Clayton Christensen, T
2019-01-09 07:33:00 Wednesday ET
Apple revises down its global sales revenue estimate to $83 billion due to subpar smartphone sales in China. Apple CEO Tim Cook points out the fact that he
2019-03-01 13:36:00 Friday ET
Global economic uncertainty now lurks in a thick layer of mystery. This uncertainty arises from Sino-U.S. trade tension, Brexit fallout, monetary policy nor