Which Data are the Fed Examining?

kmiklas

kmiklas

We all know that the Fed is printing USD120B+/month in QE. I've been harping on that point for over a year--don't forget it! Anyway, Uncle Jerome says they won't stop until "Employment" and about "A dozen other factors" point to an improvement in the economy.

1. Specifically, what is the key metric for employment?
2. Generally, what other metrics are they looking at?

If we can nail down these stats, then we'll all see first morning light of the dawning age of the age of Aquarius...

Thanks,
Keith

 
kmiklas said:
We all know that the Fed is printing USD120B+/month in QE. I've been harping on that point for over a year--don't forget it! Anyway, Uncle Jerome says they won't stop until "Employment" and about "A dozen other factors" point to an improvement in the economy.

1. Specifically, what is the key metric for employment?
2. Generally, what other metrics are they looking at?

If we can nail down these stats, then we'll all see first morning light of the dawning age of the age of Aquarius...

Thanks,
Keith

More...

None of that matters ( and a lot of other noise these days as well ). What matters is the economic growth ( eg GDP% gain ), corporate earnings, and interest rates. All three are major positives now. On the negative side are any Covid variant issues and to what extent the good side is priced in already. Also, momentum matters.

What I can say is in the areas I trade, corporate earnings are really, really good and looking to improve because commodity prices are significantly higher now. Interest rates at the pace indicated by the US Fed remain a positive ( we would need more like 3% to matter in a meaningful way imo beyond random fear mongering short term market moves ). And US IT stocks are gaining interest again which helps ensure broader market momentum remains flat to positive. Asian market strength may also help there may be value there now.

Guess we'll see but this year reminds me of 2019 in how people perceive it. There may be corrective phases but good luck timing them.
 
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Nine_Ender said:
None of that matters ( and a lot of other noise these days as well ). What matters is the economic growth ( eg GDP % gain ), corporate earnings, and interest rates. All three are major positives now. On the negative side are any Covid variant issues and to what extent the good side is priced in already. Also, momentum matters.

What I can say is in the areas I trade, corporate earnings are really, really good and looking to improve because commodity prices are significantly higher now. Interest rates at the pace indicated by the US Fed remain a positive ( we would need more like 3% to matter in a meaningful way imo beyond random fear mongering short term market moves ). And US IT stocks are gaining interest again which helps ensure broader market momentum remains positive. Asian market strength may also help.

There just isn't much reason to play the downside until early 2022 imo. Guess we'll see but this year reminds me of 2019 in how people perceive it.
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CHAIR POWELL said:
Well, let me say, as we say in our Statement on Longer-Run Goals and Monetary Policy Strategy, we look to a range of indicators on the labor market. We never only looked at the unemployment rate, which is the only indicator of, of labor market outcomes that’s in the SEP. We look at a very broad range. You hear us talk all the time about participation; about employment to population, which is the combination of the two; about different measures of, of unemployment. So it’s wages, it’s, it’s the job flows, it’s, you know, all of those things. They go into an assessment—disparities of various groups. All that goes into an assessment of maximum employment.
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Reference @ 13:00
 
For all the important data refer to the economic calendar available on various websites such as Fxstreet. Other than that you can refer to the Beige books.
 
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