Ethan Harris
Ethan Harris
adjusted bring consumer impact rates rising slowing spending tremendous
Rising rates could have a tremendous impact on slowing consumer spending. Consumer spending has been about 6 percent, when adjusted for inflation. Rising rates could bring it down to 2 or 3 percent.
delays housing impact might prices tend turn whatever
Housing prices tend to turn very slowly, and that delays whatever impact they might have on the economy.
cautious everybody line locked optimism risks
The Fed's kind of locked into this cautious optimism mode. Everybody there has the same line about how once geopolitical risks abate things will get better.
economy knew obviously revise weak
Obviously we have a pretty weak economy and this was not unexpected. We knew they were going to have to revise it downward.
economic economy hold hope looking month resolved stage war
Are the economic indicators looking like a recession? Absolutely. But you can still hold out hope that the war is resolved in a month or so and the economy can stage some kind of recovery.
entering uncertain
Now you are entering a much more uncertain period.
asian banks central current dollar downward helping investors large low market pile pressure prop relative shy start support trading treasury yields
This large inflow is an important prop for the Treasury market, helping keep yields in their current low trading range. Not only is the inflow large relative to new Treasury supply, it may also help stabilize the market when it comes under pressure. If investors start to shy away from the U.S. market, the dollar comes under downward pressure and the Asian central banks pile in to support the U.S. market.
blank budget business downside federal government optimistic planning worry
If you're doing budget planning in business, you budget for the downside risks, not for the most optimistic scenario. But the federal government doesn't have to worry too much -- it's the only business that has a blank check.
coming economy energy remarkable seems shocks underlying
Coming after the energy shocks and Katrina, it's a remarkable spring-back. The economy seems to have an underlying resilience.
data dictate economy further gradual inflation markets risks step stop strong towards
It is gradual step towards a little more flexibility. Inflation, the economy and the markets will dictate how much further they go. They say the economy is strong and that inflation risks are tilted a little to the upside. There is nothing yet in the data that will stop the Fed.
benefits lower tax
That basically, in my mind, cancels out the benefits of the lower tax rates,
balance happening improvement moves people radical talk trade
This is why people talk about radical moves down in the dollar. They just can't see an improvement of the trade balance happening any other way.
bottom continued cost discipline flow growth spent wage
You're going to see continued cost discipline. So when growth comes it won't be spent on things like wage increases, but will flow to the bottom line.
almost changed commentary fed identical officials people prior sound
I think what people will see is that commentary from Fed officials will sound almost identical to their commentary prior to this meeting. Nothing's really changed at the Fed.