For Now, Steady Job Numbers Give Fed Breathing Room

kmiklas

kmiklas

I was reading the Wall Street Journal this past Sunday, and this chart appeared on the front page.

Question: Why and how does slack in the labor market prevent inflation? Is it because when people are unemployed, they are more careful about their spending, which is a natural check against inflation?

wsj1.png


Reference: Wall Street Journal, 2/5/2017
 
If FED policies create a worse financial environment, that environment may be used as a excuse to reform the FED. The backup in unemployment rate this past NFP gives the FED some breathing room in regards to how fast they crimp easy credit. The March FOMC meeting will be key in regards to how they deal with the new political dynamics. Whether they want to go to war with the new administration or create a 'inflationary' environment sustaining easy credit for longer. So future statistics might come in surprisingly soft, to let them save face.
 
kmiklas said:
I was reading the Wall Street Journal this past Sunday, and this chart appeared on the front page.

Question: Why and how does slack in the labor market prevent inflation? Is it because when people are unemployed, they are more careful about their spending, which is a natural check against inflation?

wsj1.png


Reference: Wall Street Journal, 2/5/2017
More...

http://www.zerohedge.com/news/2017-02-10/trump-slump-soft-hard-data-transition-going-wrong-way

explains why the FED/FOMC will go light.. and tighten gradual..slowly reduce balance sheet. Bonds hit resistance, and should work themselves back over. /ZB over 154..(resistance).
 
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