The new Fed chairman Jerome Powell faces a new challenge in the form of core CPI rate hikes toward 1.8%-2.1%.

Laura Hermes

2018-02-07 06:38:00 Wed ET

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.

 


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CBS and its special committee of independent directors have decided to sue the Redstone controlling shareholders.

Daisy Harvey

2018-05-09 08:31:00 Wednesday ET

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Warren Buffett warns that the current cap ratio of U.S. stock market capitalization to real GDP seems to be much higher than the long-run average benchmark.

James Campbell

2019-08-24 14:38:00 Saturday ET

Warren Buffett warns that the current cap ratio of U.S. stock market capitalization to real GDP seems to be much higher than the long-run average benchmark.

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Former Fed Chair Alan Greenspan discerns asset bubbles in the American stock and bond markets in early-2018.

Jonah Whanau

2018-01-21 07:25:00 Sunday ET

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As he refrains from using the memorable phrase *irrational exuberance* to assess bullish investor sentiments, former Fed chairman Alan Greenspan discerns as

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Daisy Harvey

2018-06-10 19:41:00 Sunday ET

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The recent arrest of HuaWei CFO may upend the trade truce between America and China.

Fiona Sydney

2018-12-13 08:30:00 Thursday ET

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The recent arrest of HuaWei senior executive manager may upend the trade truce between America and China. At the request of several U.S. authorities, Canadi

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Tax policy pluralism for addressing special interests

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2023-12-08 08:28:00 Friday ET

Tax policy pluralism for addressing special interests

Tax policy pluralism for addressing special interests Economists often praise as pluralism the interplay of special interest groups in public policy. In

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