Caput Lupinum said:
The problem is the detail in the enjoyment statistics, participation is way down and just recently average weekly earnings started to go down (after basically rising all year). You throw in the manufacturing and last months bad non-farms plus the revision down of the month before, low PCE index, bad retail sales figures and the miss on all the ppi numbers and it doesn't paint the rosiest picture.
Mixed bag on the results last night, jobless claims down but month on month CPI was negative and YoY unchanged, ex food and energy up a tenth. The outlook survey for NY and Philadelphia looked pretty dire.
After not going in September the markets have more it less priced in a no rise enviroment for months to come, doing it abby time soon would be a real shock to the system and the fed seems pretty trigger shy now. Plus, they're either not hitting it only very very slowly heading towards their inflation target as is, if things work as they're supposed to then a rise is disinflationary and sets it all back, if they aren't meeting it at current levels the projected inflation figures with a couple rises next year are going to be much worse.
I just don't see it, so much of the economy is now predicated on cheap credit and even just the perception of an easy environment being rocked could be too big a kick to investor confidence. A quater point probably doesn't matter that much in the actual impact it has but looking at the way markets reacted when the september hike looked on and then when it wasn't done tells me that fear of a rate hike is pretty real.
I don't mean to sound like Peter Schiff but I just don't see it. They could well do it and I'm certainly no expert but with volatility showing up anywhere it's thing to be hard to pick trends and say that now it's ok.
