By EconMatters
We delve into some of the recent criticisms of the Federal Reserve in this video. In response to whether the Fed is leading the market, or vice versa Lockhart states that it is a "Dance" regarding market expectations.
Last month's major divergence between payrolls and The Fed Labor Market Conditions Index (LMCI) has closed somewhat with the collapse in jobs on Friday. However, as this morning's LMCI print at -4.8 indicates, labor market conditions in the US are deteriorating at their fastest pace in 7 years.
The 19-factor labor market conditions index developed by The Fed is not
singing from the same Koombaya "everything is awesome" hymn-sheet that
The White House would prefer...
The -4.8 print was considerably worse than the -0.8 expectation.
When previewing today's Janet Yellen speech, we first focus on BofA's chief economist Ethan Harris who looks not so much at today's event as at recent appearances by Yellen and various Fed governors and president, and is clearly getting more disenchanted by the Fed's ongoing flip-flopping, because as he says "it is fair to say that many clients are a bit confused and frustrated with Fed communication."He continues:
Every ugly nonfarm payrolls has a silver lining, and sure enough following Friday's disastrous jobs report, global mining and energy companies rallied alongside commodities after the jobs data crushed speculation the Fed would raise interest rates this month. “The disappointing U.S. jobs report on Friday means that a summer Fed rate hike is off the table,” said Jens Pedersen, a commodities analyst at Danske Bank. “That has reversed the upwards trend in the dollar, supporting commodities on a broader basis.
Submited by David Stockman via Contra Corner blog,
Donald Trump can instantly get to the left of Hillary with respect to Wall Street and the one percenters by embracing Super Glass-Steagall.