Four horseman of the economy
The Jobs market is in great shape with the Unemployment Rate in a steady downtrend and now below the Fed’s 6% threshold. After heading higher this fall Initial Jobless Claims have resumed their down trend. This shows continued improvement in the labor market. It is still tough out there for many, but the jobs market continues to improve.
Inflation is now dancing with the Fed’s 2% target level, but low oil and commodities prices are putting pressure on inflation. The end of QE has been digested nicely by the economy and market and with inflation still sanguine the Fed is not likely to crank up rates, maybe up to a flat 0.25% around midyear and then wait and see.
Consumer Confidence continues to trend higher and is now flirting with the critical 90 level and back at pre-recession levels. Despite a few frightful bumps the DJIA and the US stock market powers higher. Once we get into the end of Q1 and into Q2 and the Fed starts tightening we think the momentum will start to wane.
Inflation is now dancing with the Fed’s 2% target level, but low oil and commodities prices are putting pressure on inflation. The end of QE has been digested nicely by the economy and market and with inflation still sanguine the Fed is not likely to crank up rates, maybe up to a flat 0.25% around midyear and then wait and see.
Consumer Confidence continues to trend higher and is now flirting with the critical 90 level and back at pre-recession levels. Despite a few frightful bumps the DJIA and the US stock market powers higher. Once we get into the end of Q1 and into Q2 and the Fed starts tightening we think the momentum will start to wane.
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