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Forecasts and policy

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The ECB meets, and of course is expected to do nothing with regards to policy (the ECB excels at doing nothing). However there is some slight excitement over the prospect of the quarterly forecast update which may help shape policy expectations about next year.
  • Policy expectations about the Fed were not significantly impacted by the details of the Beige Book, released last night. Employment was generally reported as improving, with selective wage increases. Employment up, wages up, activity up is consistent with rates up, but the report was not emphatic enough to dictate the timing of tightening.
  • Service sector sentiment is due out on both sides of the Atlantic. As ever sentiment data carries the caveat of perhaps being more sensitive to media reporting than to economic reality, which perhaps diminishes its impact for policy purposes.
  • The US employment subcomponent of the sentiment index may attract some attention, with heightened anxiety about the Friday employment report. It is, perhaps, worth considering the impact of structural change (especially service sector self-employment) on such measures.