New Deal Demoncrat - now is not the time to raise interest rates! Quote:
I am at a complete loss as to why the Federal Reserve might think that now is the moment to begin raising interest rates. I cannot see a scintilla of hard evidence in support, and potent evidence against.And then he goes on to provide a large number of charts that show there are no inflation pressures, there is no wage growth, and that NAIRU=5.5% is bullshit.*
Now, he makes quite a convincing argument with paragraphs like this:
Wages now are putting less pressure on prices than at any time in the last 50 years with the exception of 8 months in 2012. This is wage pressure??? Again, of the last 600 measurement periods, only 9 of them have shown less pressure than at present. That puts us in the bottom 1.5% of all time periods in the last 50 years for wage pressure.and
So, to summarize, inflation is in the lowest 1% of all times in the last half century, wage growth is in the lowest 1.5% of the last half century, we still have extraordinarily high long-term unemployment, and a unusually high percentage of part-time employees and discouraged workers even taking into account the current unemployment rate.But what's ironic is that all the charts he's using have the word "FRED" written on them in big black letters.
Fred stands for "Federal Reserve Economic Data".
I strongly suspect, good chap, that the Federal Reserve has also looked at these charts.
Now Krugman's already been beating this horse for months, but NDD is one of the more sensible people in the econoblogosphere below Kruggers; so if even he is now starting to scream and foam at the mouth about a June rate hike, then it's only a matter of days before the fear filters down into the mass stupidity of the honky hedge fund crackers and the CNBC talking heads.
So I guess we'll get a good strong market correction for the next 2 weeks. Question is whether we'll be able to buy March 19th for a quick turnaround, or whether we'll have to wait til April.
* - personally I think the high supposed NAIRU of the US, when compared to other countries, is actually a right-wing dog-whistle about how blacks and hispanics don't want to work for a living.