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Today's June jobs report is being touted as strong enough to put any chance of a Fed ease on hold. That's silly, in my view. Putting things in the proper perspective, today's job report was one more in a year's worth of mediocre numbers. Private sector jobs (the ones that really count) have been growing at a 1% rate for over a year, which is consistent with real GDP growth of about 2%, a bit less than we've seen since 2010. Nothing in this report should give the Fed a reason to keep monetary policy tight.
3 comments:
It seems like the bill will cause more real world inflation than tariffs.
Thank you Scott. Do you think they are going or hoping for negative real rates to deal with the debt?
I agree.
In addition, much US inflation stems from tight housing markets, a legacy of criminalizing housing production for decades nearly everywhere, but especially California.
As for US debt, like everyone else I would prefer balanced budgets.
Since that ain't going to happen, the Fed should grow its balance sheet, and maybe a 2% to 35 inflation target would be better---this would stop the US from becoming over-indebted.
The Bank of Japan owns 50% of Japan's government bonds, and their problem until recently was deflation.
Interest paid on JGB's goes back into the national budget.
You have a better solution...for the real world?
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