The Fed’s outlook on the economy hasn’t changed much since December. In turn, policy expectations are largely the same as well. Officials are comfortable enough in their outlooks to continue gradually normalizing monetary policy, but they don’t see enough pressure to move more rapidly.
Prior to seasonal adjustment, the U.S. economy added more than a million jobs in February (unadjusted payrolls rose by 831,000 in February 2016 and by 832,000 in February 2015).
The majority of U.S. economic data are based on statistical samples and the various figures are typically adjusted for seasonal variation. That means that the numbers are subject to some level of uncertainty.
President Trump is expected to announce a revised tax cut plan soon. In the meantime, it’s worth revisiting how the sausage gets made in Washington. By law, tax code changes must originate in the House of Representatives, and the Senate will have its say.
Fed Chair Janet Yellen will present her monetary policy testimony to Congress on Tuesday and Wednesday. We may not learn much new regarding the pace of future rate increases (which will remain data-dependent) and she’s certain to avoid getting into any discussion of fiscal policy.
As passive investing has become increasingly popular, the number of indices that track stocks has exploded. More portfolios are being built to track a wider range of exotic indices. But do investors really know what they’re getting?
January economic data are relatively unreliable, but recent figures paint a fairly consistent picture of where we are headed in the near term. While there is reason to be optimistic, it’s still a mixed bag, with some concerns about what we’ll see coming out of Washington over the next several months.
Real GDP rose at a 1.9% annual rate in the initial estimate for 4Q16, with the headline growth figure held down by a wider trade deficit. That does not mean that foreign trade is a drag on the U.S. economy.
It goes without saying that there is a sharp contrast between the economic views of the incoming administration and those of the Federal Reserve. President Trump, and most of the individuals who voted for him, sees a weak economy, devastated by job losses in manufacturing. The Federal Reserve sees an economy nearing full employment. So who’s correct?