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Silent tweet

| Posted by: Paul Donovan | Tags: Paul Donovan

  • As yet, there has been no tweet from Trump on the Federal Reserve's decision. Does this represent respect for the Fed's independence? Or does it mean that a tweet has been dictated but not tweeted? It is unlikely to signal endorsement as Fed Chair Yellen suggested fiscal stimulus was not needed to boost employment.
  • The media got very excited about the move in the median of the Fed's dot interest rate projections. Members of the Fed do not like the cursed dots (there has been talk of a boycott in the past), and Yellen cautioned against over-interpretation, but the media went ahead and over-interpreted anyway.
  • Away from the real world, opinion polls on the sentiment of the Euro business sector are published in the form of PMI data today. The Euro area economy is performing well, if in a divergent manner. Whether opinion polls add to the quality of our understanding about that is debatable.
  • The US offers consumer price inflation. The oil price effect is well understood (rising oil prices impact both headline and core consumer prices). Broad-based inflation pressure comes from the labor market. Indicators like the Fed's wage tracker show rising wages, and domestic labor cost is around 70% of US inflation.