Hopes for a strong rebound are now fading. The likelihood of a near-term Fed action is almost zero now. Thomas Costerg More Quotes by Thomas Costerg More Quotes From Thomas Costerg I think the Fed is going to be worried about the second round consequences for the European Union, even with stronger U.S. data, I don't think the Fed will tighten policy. It has already been anxious about the global picture, it is increasingly behaving like the central bank of the world, and it will likely remain really worried about what it means for the EU. Thomas Costerg business The Fed dots are very likely to come down again in March. The question is whether the Fed dots remain relevant at all. Thomas Costerg top-news The U.S. economy is a two-sided economy. The domestic sector continues to power job growth. There is a risk that the weakness in manufacturing could spread to services, but we don't see that right now. Thomas Costerg top-news There is nothing that derails a December Fed rate hike in today's data. Inflation is starting to turn a corner and manufacturing production remains resilient. Thomas Costerg most-read-articles The guts of the report were healthy, they still show strong underlying momentum in the economy and that puts a December rate hike firmly on the table. Thomas Costerg most-read-articles The market has been a little bit quick to price out a December Fed rate hike. What you are seeing in the data is that the domestic picture looks strong and I think that's what the Fed is going to be looking at closely. Thomas Costerg top-news Because of the volatility, you'll need an even stronger report to get them to hike, a middling report might not be enough if markets continue on like this. Thomas Costerg business We think inflation will grind higher over the summer and open the door to a September rate hike. At the same time, low underlying inflation pressures mean the tightening cycle will only be gradual. Thomas Costerg top-news The weakness in the U.S. recovery is not like a cart losing its wheels because the labor market remains healthy and housing activity is picking up. Thomas Costerg business The first quarter is not a true reflection of the health of the U.S. economy right now, it's not the beginning of a downturn. Thomas Costerg business Despite stronger employment momentum, slow wage growth and inflation mean there is no rush to tighten (monetary) policy. The Fed may wait until September. Thomas Costerg business The fact that wage growth is low provides support to the Fed view that there is no rush to raise rates. Thomas Costerg top-news Momentum is weakening in the fourth quarter. While there is no reason to be pessimistic, it curbs some of the enthusiasm we had seen after the strong growth of the past two quarters. Thomas Costerg business
