- We do not think we need further cooling in the labor market to get inflation down to 2%.
- The job market is gradually cooling down
- We see the general inflation story on the way
- Job creation is below the level that would maintain a steady unemployment rate
- Downside risks to the labor market have eased but are still cooling
- The real cuts next year will be in terms of data, not something we wrote down today
- As for further cuts, we are going to be looking for further progress on inflation or weakness in jobs
- As long as jobs and inflation are strong, we can be 'cautious' about cutting
I think that speaks strongly for itself. We'll see what the jobless claims are tomorrow and go from there. The bottom line strongly indicates that we will leave rates unchanged in January but we will get three jobs reports before the March meeting and it is priced around 50/50.
- We had an inflation forecast at the end of the year and 'it's kind of fallen apart'
- Saying that is probably the biggest feature in dots
The market doesn't like hearing the Fed chair say 'it's kind of collapsed' in any context.
This article was written by Adam Button at www.forexlive.com.
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