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More Paulson: Sees labor provide and demand for employees declining at about the identical tempo

  • The Fed has great sources of information even with the government shutdown.
  • Next year is a long way off in terms of monetary policy.
  • So far seen both labor supply and demand for workers declining at about the same pace.
  • The breakeven rate for monthly jobs is lower than it was and hard to assess right now.
  • Suspect the breakeven rate is lower than 75K per month.
  • Would not want to step on a productivity boom
  • the Fed should explore what productivity growth can be.
  • Muted tariff inflation so far is a testament to business creativity in managing costs.
  • Do not see the type of demand conditions that would turn a series of supply shocks into persistent inflation.
  • The Fed will have to fields way to the neutral rate.
  • Growth right now is strong, but hard to see how that is sustained.
  • If inflation shows a burst the Fed would have to react
  • Market expectations are generally more reliable than household surveys on inflation expectations.

More dovish comments from Chicago Fed Pres. Paulson

This article was written by Greg Michalowski at investinglive.com.

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