1/24/2021 10:10:00 AM
Expectations are there will be no change to rate policy when the FOMC meets on Tuesday and Wednesday this week.
Here are some comments from Goldman Sachs economists: The January FOMC meeting should be fairly quiet. While the pace of economic recovery has faltered in recent months due to virus resurgence, nearly all Fed officials have said that the medium-term outlook remains bright. We expect the statement to acknowledge the negative growth news and worsening public health situation but to stop short of suggesting any downgrade to the medium-term outlook. .Our best guess remains that the Fed begins tapering in 2022 .
1/14/2021 5:09:35 AM GMT
The Trump impeachment vote was overshadowed by momentous scenes at 0530 this morning in South Jakarta, as Queen Cricket returned to her palace. The unannounced royal trip, lasting two nights, led to frantic searches of the wider realm by her servants. Her feline highness announced her arrival loudly at the front door of the palace in the early hours. That was followed by an immediate spot inspection of the royal facilities, an early breakfast of tuna and jelly, before swatting Princess Twinkle and taking some royal repose.
Mrs Halley and I are thankful for Her Majesty s return, as are other royal household members. Thanks once again to all those from around the world wishing a speedy and safe return from Her Majesty. Netflix s The Crown production team have not yet contacted us, but we are expecting a call imminently.
January 14, 2021SharePrint
Dovish Fed Governors cap dollar’s gains
A plethora of Federal Reserve Governors, notably Harker, Brainard and Clarida, along with some successful bond auctions, managed to cap the rise in US yields overnight, with the 10-year now over ten basis points off its recent highs. Harker said that the Fed would basically keep rates lower for longer. Brainard, always an uber-dove, said much the same and added that the Fed could increase bond purchases if necessary. Clarida noted that when the Fed does raise rates, they will only have to raise them slightly to reach a neutral policy stance. He added that the Fed would like to see one year of two per cent inflation before tightening. Despite the dovish chorus emanating from the Fed, the dollar finished the overnight session stronger. The dollar index rose 0.30% to 90.35 and has climbed to 90.40 this morning. That leaves the index mid-range with critical levels being 90.00 and 91.00.
The DOL reported:
In the week ending December 12, the advance figure for
seasonally adjusted initial claims was 885,000, an increase of
23,000 from the previous week s revised level. The previous week s level was revised up by 9,000 from 853,000 to
862,000. The 4-week moving average was 812,500, an increase of 34,250 from the previous week s revised average. The
previous week s average was revised up by 2,250 from 776,000 to 778,250.
emphasis addedThis does not include the 455,037 initial claims for Pandemic Unemployment Assistance (PUA) that was up from 415,037 the previous week.
The following graph shows the 4-week moving average of weekly claims since 1971.
Click on graph for larger image.
The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 812,500.
2.4 to 3.0
1 Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.
The unemployment rate was at 6.7% in November, down from 6.9% in October, and might decrease more in December. This will put the unemployment rate for Q4 below the lower end of the September projections.
Note that
the unemployment rate doesn t remotely capture the economic damage to the labor market. Not only are there 10.7 million people unemployed, and 4.1 million people have left the labor force since January. And millions more are being supported by various provisions of the CARES Act - that still hasn t been renewed and is schedule to expire on December 26th.