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Fed minutes analysis with Moody's Analytics John Lonski

Thursday, October 08, 2015 - 03:58

John Lonski, Chief Economist at Moody's Analytics talks about the Fed minutes from the September meeting, and what they could mean for monetary policy. Bobbi Rebell reports.

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The fat and it from the September meeting are out and they revealed a policy makers were concerned about climate and the global economic slowdown. Let's get more from John he's chief economist at Moody's analytics break have you see here are so what was the most important with our business. If that it's gonna keep the time what's going on overseas. It definitely wants to see a steady. An improvement some sign that rates of resource utilization outside the United States are on the verge of climbing before it hikes rates. When you look at this mess that the clarify acting like it will work. Surprise that they cannot retrieve her I think it's very much did it what this is telling me is that unless we begin to see steady climb. Why industrial commodity prices are up a about the price of oil. An industrial metals prices chances are that monetary policy will be left unchanged. Credibility to the press that the fact that these days your concern about that you can see me it's as perhaps. Well I think the effect was perhaps a little bit unduly optimistic in its assessment of the US economy in the world economy not too long ago. I don't know why they're doing this. Given the fact of financial markets in the global economy are so sensitive to expectations. Regarding that your in this of this long awaited first rate hike. So what is your when that first race it will be and should be. I I'm a first rate hike is probably going to occur. Perhaps why march. 26 team who waited till that. And hopefully by that time we will see improvement in the world economy. That will pass itself off to the US economy so the US equity market and corporate bond market can easily would stay that. The kind of zero interest rate policy. You think it should be that's when it will be is that our contract basically that's where I think it should be I think the Fed very much has the what tree. I'll wait until we see stabilization of the world economy world financial markets before it needs to move I think it's ridiculous at this point in time. To make the statement that in less that it tightens fairly soon we risk and it. Wait Cherie runner up like wages that's not gonna happen you know we've got the unemployment rate come down by. More than a percentage point over the past Walt eighteen months and yet wages are still. Buehrle growing by just over 2% annually moreover some cases companies are cutting back and hours of work they're cutting back on staffing plans. And as a result wages salary com. Overall is growing by just over 4% annually. So clinic asking you're actually did have a really encouraging weekly jobless claims report has changed but I don't know I don't know what they're like two weeks of the season that disconnect between Asia they jobless claims in what's going on terms of jobs creation. The reason why this. Is because jobless claims she's just focused on the number of unemployed and it basically ignores what's going on with job creation. And that has been trailing off quite significantly. You know. When we first got that disappointing news on an August employment for the private sector many people dismiss that quite meet all you know time and time again this ever has been revised sharply higher however this time around the opposite occurred. And that August estimate of private sector payrolls. Was actually revised lower. Take that it is in it you are at Q that that weak reading on private sector jobs were September and I think the market has reason to be concerned. Up while the outlook for consumer spending are you got time to wait. Time inflation doesn't lurked beyond just behind your quarter. We're not on the verge of trying you know having to go through some sharp run up by price inflation that will be dearly. It possible to reverse this is in the 1970s. Disco was one yet. Apparently. Thinking. Thank you I think in the end on it. Not hear about that.

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Fed minutes analysis with Moody's Analytics John Lonski

Thursday, October 08, 2015 - 03:58