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.
2020-03-26 10:31:00 Thursday ET
The unique controversial management style of Steve Jobs helps translate his business acumen into smart product development. Jay Elliot (2012) Leading
2019-04-13 14:28:00 Saturday ET
Saudi Aramco unveils the financial secrets of the most profitable corporation in the world. In its recent public bond issuance prospectus, Aramco offers the
2019-06-13 10:26:00 Thursday ET
The Chinese Xi administration may choose to leverage its state dominance of rare-earth elements to better balance the current Sino-U.S. trade war. In recent
2019-02-02 11:36:00 Saturday ET
The Trump administration teams up with western allies to bar HuaWei and other Chinese tech firms from building the 5G high-speed infrastructure due to natio
2017-11-27 07:39:00 Monday ET
Is it anti-competitive and illegal for passive indexers and mutual funds to place large stock bets in specific industries with high market concentration? Ha
2018-11-19 09:38:00 Monday ET
The Trump administration mulls over antitrust actions against Amazon, Facebook, and Google. President Trump indicates that the $5 billion fine against Googl