Last quote by Michael Feroli
Michael Feroli quotes
These changes were modest but in an optimistic direction, and the improved risk assessment could begin to lay the groundwork for a hike in a few meetings' time, provided the data cooperate. We continue to look for a second rate hike in December, and we still believe we'd need to see some blockbuster employment and inflation data to make September a realistic possibility.
On the heels of the Brexit developments we are pushing back our Fed call from September to December; there is exceptionally low visibility on the monetary policy outlook right now.
The risk of data dependency is that it becomes data jumpiness.
For the Fed, it seems safe to say that a June hike is off the table. For now we are sticking with our July call but recognize the likelihood has gone down quite a bit and that we'll need to see a sharp turnaround in the activity data for that to play out.
The simplest explanation is that job growth tends to respond with a lag to GDP growth, and GDP growth was rather weak around the turn of the year. This would suggest job growth should recover along with overall growth in economic activity.
Today's report raised some eyebrows given the string of negative commentary from retailers, but that juxtaposition is a useful reminder that publicly traded corporations account for a minority of economic activity in the U.S.
It's widely understood that it would be politically treacherous for the Fed to hike just before a very heated election.