Last quote by Paul Ashworth
Paul Ashworth quotes
We simply can't know what type of President Trump will be.
Given the adverse market reaction we have already seen, the Fed's planned December rate hike is now off the table.
The election could still derail the Fed's plans, particularly if a very close result led to one or both candidates contesting it via the courts.
It is still a welcome sign that the dollar appreciation in 2014 and 2015 is no longer weighing on exporters. Nevertheless, while overall exports added 1.2 percentage points to GDP growth, without the spike in soybean exports it would have added only 0.3 percentage points.
Accordingly, a reasonable case could be made that this is actually a disappointing GDP report.
A rate hike is on the way.
Exports are beginning to show signs of life as the drag from the dollar's surge in 2014 and 2015 begins to fade.
It's one weakness replacing another.
If Trump wins, we now think Yellen would resign fairly quickly as a matter of principle. The main reason for believing that Yellen would resign almost immediately is that falling on her sword would take some of the political heat off the rest of the FOMC.
If Donald Trump wins November's presidential election, there is now a clear possibility that Fed Chair Janet Yellen would resign almost immediately, perhaps even before the mid-December (Federal Open Market Committee) meeting. It is hard to see how she could continue in her position until her current term expires in early 2018.
This seems to have been one of the most divisive FOMC meetings in recent memory.
The Fed appears to be firmly on track for a December hike.
This makes us very nervous for the third quarter.
The mistake we made in the second quarter was trusting the incoming monthly activity data we had that, right up until the last minute, pointed to a strong showing from second-quarter GDP growth. In contrast, the surveys were pretty weak and suggested that growth wouldn't be much above 1 percent annualized.
The August employment report is not going to convince Fed officials to vote for a rate hike later this month, although an increase in December is still likely.
Given that employment has rebounded, consumer confidence is holding up, I'm not overly concerned.
As well as being a long way above the consensus forecast of a 180,000 gain, the strength of July's employment report was unusually broad-based.
The GDP data have significantly reduced the chances of a near-term rate hike.
What is really worrying is that pace has still been enough to reduce the unemployment rate further, suggesting that the economy's potential growth rate could conceivably be close to zero.
Leave or remain, this probably isn't going to affect Fed policy.
That sound you hear is Fed Chair Janet Yellen furiously rewriting her speech that she is scheduled to give (in Philadelphia) on Monday.
Labor market conditions are stable, which is all the reassurance the Fed will need to act soon.
The lack of a more marked pickup in wage growth is the only missing element. But as far as the Fed is concerned, it is already seeing a clear acceleration in core price inflation. A June rate hike is coming.
The weaker drag from inventories in the fourth quarter means that any rebound in the first quarter could be slightly more modest than we previously expected.
The biggest medium-term threat to the living standards of Americans is the chronic lack of productivity growth.
Before we get too carried away, however, it's worth stressing that the record warm temperatures in the fourth quarter, and December in particular, probably paid a role. It's notable that construction employment increased by a massive 45,000 last month and more than 120,000 in the fourth quarter.
Employment was never going to continue rising at more than 200,000 a month indefinitely. Those monthly gains are simply unsustainable.
While it's important not to over-react to one data point, there are exceptions and this is one of them. Employment growth is clearly on fire and its beginning to put upward pressure on wage growth. The Fed can't wait much longer in that environment, particularly not when interest rates are starting at near-zero.