The Research Team at Nomura share Fed’s assessment of the US economy, with the central bank now viewing a ‘substantial decline’ in measures of inflation compensation from the previous ‘somewhat decline’.
Key Quotes
“Information received since the Federal Open Market Committee met in December suggests that economic activity has been expanding at a solid pace.”
“Labor market conditions have improved further, with strong job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish.”
“Household spending is rising moderately; recent declines in energy prices have boosted household purchasing power. Business fixed investment is advancing, while the recovery in the housing sector remains slow.”
“Inflation has declined further below the Committee’s longer-run objective, largely reflecting declines in energy prices. Market-based measures of inflation compensation have declined substantially in recent months; survey-based measures of longer-term inflation expectations have remained stable.”
Key Quotes
“Information received since the Federal Open Market Committee met in December suggests that economic activity has been expanding at a solid pace.”
“Labor market conditions have improved further, with strong job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish.”
“Household spending is rising moderately; recent declines in energy prices have boosted household purchasing power. Business fixed investment is advancing, while the recovery in the housing sector remains slow.”
“Inflation has declined further below the Committee’s longer-run objective, largely reflecting declines in energy prices. Market-based measures of inflation compensation have declined substantially in recent months; survey-based measures of longer-term inflation expectations have remained stable.”
