Central banks and market optimism on rates

The problem, if it can be called that, is that the economy appears to be in rude health. These are not the numbers that would be produced by an economy desperately in need of a rate cut.

Ben Bernanke’s record is very defensible, but his best-known quote by far is his comment in the summer of 2007 that the “vast majority of mortgages, including even subprime mortgages, continue to perform well.” 

https://www.cnbc.com/id/18718555

There’s a widespread belief in markets that the FOMC will want to do all it can to avert a Trump victory in November, and therefore cut rates sooner than otherwise. 

Whether or not this is true, it does make it harder to cut; Donald Trump would doubtless call foul, and heap derision /hån/ on Jerome Powell and his colleagues.

John Authers Bloomberg 26 januari 2024

https://www.bloomberg.com/opinion/articles/2024-01-26/inflation-politics-fed-fears-being-sucked-into-a-rate-cut-riptide

About Ben Bernanke at International Communications Rolf Englund (internetional.se)

The personal-consumption expenditures price index, rose 0.2% in December from the previous month. 

That was up from a 0.1% decline in November but still consistent with subdued inflation.

December prices were up 2.6% on the year. 

Core prices, which exclude volatile food and energy costs, rose 0.2% on the month in December and 2.9% on the year 

Americans’ spending rose 0.7% in December from November, while incomes increased 0.3% last month.

WSJ 26 January 2024

https://www.wsj.com/economy/central-banking/what-to-watch-in-fridays-spending-report-a-last-look-at-inflation-before-the-fed-meeting-353665d9