Chickens, Eggs, Hawks And Doves
Add SocGen to the list of banks expecting the Fed to go big -- very big -- at this month's policy meeting.
On Friday, the bank's Stephen Gallagher called recent developments on the inflation front "particularly troubling." "We now expect a 100bps hike," he wrote, citing increases in "sticky" inflation components, which tend to be correlated to tight labor markets.
The 100bps versus 75bps debate continued into the weekend, as data showed US retail sales for June were resilient, potentially help
You need to lend Mr. Gallagher your pen Mr. H
I’m on vacation. But I managed to hear a more complete version of Waller’s comments. What caught my half open ear was when he mumbled, almost as an aside, something like”I cannot fathom how we can sink into a recession given all of the job openings.”
I wonder if he ever lifted the hood to check how many of of job advertisements are for part time jobs or are lingering ads which offered salaries which were ridiculous even before the current system-wide jump in wages?
To quote a wonderful eTrade ad, “that was a joke, sir!”
There is one other solution to the rent/buy housing solution. Supply. Not sure we will get it- but something has to give here. I would also guess that demand for housing will weaken a little bit when we get past covid as the craving for space to work at home will moderate (not disappear- but moderate). At the margin I would expect in some markets at least we will see a little bit more capital devoted to producing residential accomodations- even if it boils down to fixing up existing housing stock rather than just building new supply.