Ethan Harris
Ethan Harris
budget china congress course gradual growth happen ideal less none percent pressure three works
In an ideal world, three simultaneous gradual adjustments would happen. The U.S. eliminates the budget deficit, China revalues by 30 percent and China works to rebalance growth more to consumption and less to exports. Of course none of this will happen and the pressure for protectionism from Congress grows.
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.
adjustment leak market slow
The market has some adjustment to do, but it will be more of a slow leak than a pop.
applying believe labor number people sure
I'm not sure I believe the Labor Department. On Friday, there must have been a below-normal number of people applying for benefits.
arguing fed growth inflation rising speakers string
The combination of still-strong growth and rising inflation has prompted a string of hawkish Fed speakers all arguing strenuously for the need to keep inflation contained,
challenger device healthy number telling useful
Even in a healthy economy, you have layoffs. The Challenger number is more useful as a story telling device than an indicator.
bills both economy hitting immediate impact moderate oil process recent shock slowing spending though value waiting winter
I think the economy is already in the process of slowing to a more moderate pace. Oil has both an immediate impact on spending and lagging impacts. Even though oil has stabilized in recent weeks, we still have to play out effects. We're still waiting for the shock value of the winter heating bills hitting people.
erosion explosion question sudden
It's not a question of a sudden explosion in prices. It's more an erosion of the low-inflation psychology.
bark fed good saying sound tested
The Fed is saying that 'we're being tested here, we're being tested on our anti-inflation credibility,' ... They need to sound tough. They need a pretty good bark to go with their bite.
lined
This is one of the very-easy-to-interpret reports. In this one, everything lined up like the planets.
concern people voting
They're voting with their wallets and they're spending. There's always a concern that people just don't like what they're seeing, but they are still buying.
almost convince inflation last straw
I think that (high inflation readings) would be almost the last straw to convince the Fed.
challenger device healthy number telling useful
Even in a healthy economy, you have layoffs, ... The Challenger number is more useful as a story telling device than an indicator.
corporate force growth holding line matter profit profits recent seen slow stay work workers
I think we know corporate profit growth can't stay at the rate we've seen in recent quarters. They (employers) have been squeezing the work force pretty aggressively, squeezing productivity out of workers and holding the line on wages. It's a matter of how much corporate profits slow down.