Fed's Barkin cautions that economic data around the turn of the year can deceive
The data is remarkable but Says he won't be taking a signal from one monthThere are big seasonal adjustments around the turn of the yearWe have some time to be patientThere is a model where you toggle rates down this yearIt's certainly possible that the neutral rate is higher but the standard deviation on neutral rate forecasts is about 200 bps, so it could be 0.50% or it could be 4.50%.I think you have to acknowledge how good the inflation data has been for the past seven monthsWe will get a 'few' more months on inflation and I would very much like to see that continue and broadenGoods deflation has been masking sticking services inflationI'm looking for these numbers on inflation to be sustained and broadenedI take a lot of a signal from just how historically strong employment has beenI'm hearing there isn't as much hiring but not as much firing eitherTo the extent that I'm hearing of job cuts, it's on the professional side. It's overhead not front-lineI hope and expect that banks have enough capital to weather commercial real estate lossesI find it's interesting that he said they will have a 'few' more meetings to look at inflation. That sounds more like he's looking at June cuts rather than May, and Barkin is a bit of a dove. This article was written by Adam Button at www.forexlive.com.
- The data is remarkable but
- Says he won't be taking a signal from one month
- There are big seasonal adjustments around the turn of the year
- We have some time to be patient
- There is a model where you toggle rates down this year
- It's certainly possible that the neutral rate is higher but the standard deviation on neutral rate forecasts is about 200 bps, so it could be 0.50% or it could be 4.50%.
- I think you have to acknowledge how good the inflation data has been for the past seven months
- We will get a 'few' more months on inflation and I would very much like to see that continue and broaden
- Goods deflation has been masking sticking services inflation
- I'm looking for these numbers on inflation to be sustained and broadened
- I take a lot of a signal from just how historically strong employment has been
- I'm hearing there isn't as much hiring but not as much firing either
- To the extent that I'm hearing of job cuts, it's on the professional side. It's overhead not front-line
- I hope and expect that banks have enough capital to weather commercial real estate losses
I find it's interesting that he said they will have a 'few' more meetings to look at inflation. That sounds more like he's looking at June cuts rather than May, and Barkin is a bit of a dove.
