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.
2020-07-19 09:25:00 Sunday ET
Senior business leaders can learn much from the lean production system with iterative continuous improvements at Toyota. Takehiko Harada (2015)
2023-03-14 16:43:00 Tuesday ET
Several feasible near-term reforms can substantially narrow the scope for global tax avoidance by closing information loopholes. Thomas Pogge and Krishen
2019-02-28 20:44:00 Thursday ET
AYA Analytica finbuzz podcast channel on YouTube February 2019 In this podcast, we discuss several topical issues as of February 2019: (1) our proprieta
2018-04-13 14:42:00 Friday ET
Mike Pompeo switches his critical role from CIA Director to State Secretary in a secret visit to North Korea with no regime change as the North Korean dicta
2019-04-27 16:41:00 Saturday ET
Tony Robbins suggests that one has to be able to make money during sleep hours in order to reach financial freedom. Most of our jobs and life experiences tr
2020-02-12 09:31:00 Wednesday ET
Mark Zuckerberg develops Facebook as a social network platform to help empower global connections among family and friends. David Kirkpatrick (2011) T