Daily update
Daily update
- The Federal Reserve’s meeting minutes showcased a full range of opinion, with advocates of rate cuts, a long pause, and the possibility of rate increases. Were it not for the inability of the minutes to spell the word “labour” correctly, this level of disagreement would give the impression of a Bank of England rather than a Fed meeting. There was a consensus around stabilizing US labor markets. Overall, the minutes still allow for rate cuts, but an immediate easing is unlikely.
- Yesterday, one of US President Trump’s advisers, Hassett, suggested Fed economists should be disciplined for the views expressed in a research paper. The economists’ views are widely held by other economists (and the US public), and the attack raised some concerns about policy independence—but Hassett may have misspoken in the excitement of appearing on television.
- There is no market moving data from Europe, but the politics around who might succeed ECB President Lagarde has started (with almost indecent haste). In an ideal world, the best qualified economist would be appointed. We do not live in an ideal world.
- US December trade data has some political importance, and inventory data hints at how US companies have tried to avoid tariff costs. There are also four Fed speakers scheduled.