Stable participation rate testifies of strong labour market

  • Tax changes in DC will provide some growth lift in coming years
    Macroeconomic effect of any tax changes are uncertain
  • Expects job market to remain strong in years ahead
  • Weaker inflation believed to be due to transitory developments
  • Expecting inflation to gradually reach the 2%
  • Interest rates to be adjusted gradually
  • Fed funds will not need to rise much further to reach a neutral stance
  • Policy is not on a preset course, neutral rate lower than previous decades

Last press conference from Yanet , thanks lady and “bon vent”

  • Q&A:Fed did discuss tax policy; most of colleagues did put fiscal stimulus into projections
  • Fed projections should not be viewed as an estimate of fiscal stimulus
  • Sees modest pace of wage gains but no overheating
  • Modest wage gains reflects slow productivity growth but also points to some slack still in labor market
  • We are in the vicinity of full employment
  • The stock market has gone up a great deal this year; in last few months we have characterized asset prices as elevated; high valuations don’t necessarily mean that assets are overvalued; low interest rates tend to support higher valuations
  • Not seeing anything flashing red or even orange on financial stability
  • Bitcoin is a highly speculative asset that plays a very small role in payment systems
  • Until this year, undershooting inflation target was understandable; this year there was a sequence of negative surprises starting in March;
  • its possible that the inflation undershoot could become more ingrained that may require a rethink on inflation
  • Would be challenging to achieve 4% GDP growth; Fed would welcome stronger growth produced by fiscal stimulus plans
  • Current yield curve is well within its historic range; the curve is somewhat flatter, reflecting higher short term rates; yield curve is likely going to be flatter than it has been in the past
  • Sees low odds of a recession

USD continues to slide: EURUSD 1.1815, CABLE 1.3410, USDJPY 112.55, AUDUSD 0.730, NZDUSD 0.7020, USDCHF 0.9850, USDCAD 1.2810
All pretty important levels we’re seeing.

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