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You Can Forget About A September Taper Unveil
August's jobs report will be a test of market participants' commitment to a bull case predicated (in part anyway) on the notion that the Delta variant and a cooling US economy will compel the Fed to remain cautious as policymakers look to trim the pace of monthly asset purchases.
I wrote that sentence on Thursday evening -- so, prior to Friday's jobs stunner. Like everyone else, I expected a reasonably robust headline NFP print, Wednesday's lackluster ADP report notwithstanding. Given that, I r
One of the ideas that gets repeated here is that fed policy isn’t entirely, or even mostly, responsible for the inflation we’re currently experiencing.
An interesting question, to me anyway, is how responsible for job growth is fed policy? Will a dovish taper schedule do any heavy lifting in terms of promoting new hires over the next 3-5 months? If so how will that compare with the 12-24 month interest free offers I’m getting on essentially any purchase I want to make which, unfortunately, consist mostly of imported goods.
I’m thinking the walls may be starting to close in on the FOMC…
…unless a stabilization of Delta virus leads to a major hiring and confidence rebound in September … tapering earliest possibility in December then imho … walls closing in while standing in quicksand… just to throw in a dramatic flare for the long weekend…
The FOMC will taper. Likely an announcement on or around December – January. It will probably take them into late 2022 to finish or possibly even longer. Better if you are an investor to focus on the virus and the general direction of the economy, and most importantly try to figure out sentiment. Technicals for stocks are still pretty good so best bet is watchful waiting if you are invested in an appropriate way for your risk tolerance and time horizon. As a general rule, the economy takes longer to recover than most economists and investors think. This time is probably no different. By this time next year, expect the improvements in the economy to slow down significantly. Right now it is so tough to invest for clients.