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.
2018-01-07 09:33:00 Sunday ET
Zuckerberg announces his major changes in Facebook's newsfeed algorithm and user authentication. Facebook now has to change the newsfeed filter to prior
2019-06-05 10:34:00 Wednesday ET
Fed Chair Jay Powell suggests that the recent surge in U.S. business debt poses moderate risks to the economy. Many corporate treasuries now carry about 40%
2019-05-19 19:31:00 Sunday ET
MIT professor and co-author Daron Acemoglu suggests that economic prosperity comes from high-wage job creation. Progressive tax redistribution cannot achiev
2020-09-24 10:26:00 Thursday ET
Edge strategies help business leaders improve core products and services in a more cost-effective and less risky way. Alan Lewis and Dan McKone (2016)
2019-05-23 10:33:00 Thursday ET
Berkeley professor and economist Barry Eichengreen reconciles the nominal and real interest rates to argue in favor of greater fiscal deficits. French econo
2018-05-15 08:40:00 Tuesday ET
Net neutrality rules continue to revolve around the Trump administration's current IT agenda of 5G telecom transformation. Republican Senate passes the