“All quiet on the E. Front”

There´s absolutely nothing new on the economic front! So why there´s so much talk about “policy normalization” (i.e. increase in rates)?

Since the economy “pulled-up” from the “gutters” of the “Great Recession” a “mediocre moderation” has established itself. It´s growth all right, which is more than the EZ, for example, can flaunt. But in this case, doing better than the Jones´ is not the appropriate yardstick! It only self-serves the US policymakers.

All Quiet_1

Maybe the persistent drop in the unemployment rate over this period is “side-tracking” monetary policy makers. Inflation below target is “good” and if unemployment is reaching “full employment” the time is nearing for “us” to act!

All Quiet_2

Earlier this year, before the quarter1 GDP release, the NGDP Indicator was pointing to growth remaining close to 4%. At the time so was Justin Irving´s real time NGDP forecast, but now it´s down a notch!

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