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BULLET: US DATA REACT: JPM's Michael Feroli adds the.........

Release date: 03 Nov 2017

BULLET: US DATA REACT: JPM's Michael Feroli adds the.........


US DATA REACT: JPM's Michael Feroli adds the "solid trend in employment growth
is consistent with another good quarter for GDP growth, and we are comfortable
with our early estimate of 2.5% output growth in Q4. While demand growth remains
robust, the weakness in aggregate supply has implied ongoing downside surprises
to the unemployment rate; the October reading is already 0.2%-pt below the
median FOMC projection of 4.3% for 17Q4, an estimate formed less than 2 months
ago."
- He adds that "in this environment, we believe the Fed will see even more need
for a steady, regular removal of accommodation" so JPM now projects there will
be in 2018, "four 25 basis point hikes in the funds rate," "up from 3 hikes
previously. We think there's about an even chance that the median dot at the
December meeting moves up from 3 hikes to 4, but in any event that median dot
will likely be predicated on a forecasted flattening out of the unemployment
rate: a forecast which has consistently failed to materialize."

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