Former FT Alphavillain, now Financial Times US economics editor Colby Smith uses the interview as her jumping-off point:
Fund’s second-in-command urges Fed to ‘stay the course’ on rate rises this year
Inflation in the US has not “turned the corner yet” and it is too early for the Federal Reserve to declare victory in its fight against soaring prices, a top IMF official has warned.
In an interview with the Financial Times, Gita Gopinath, the fund’s second-in-command, urged the US central bank to press ahead with rate rises this year despite a recent moderation in headline inflation following one of the most aggressive tightening campaigns in the Fed’s history.
“If you see the indicators in the labour market and if you look at very sticky components of inflation like services inflation, I think it’s clear that we haven’t turned the corner yet on inflation,” she said, adding that the fund’s advice to the Fed was to “stay the course”.
The comments from the fund’s first deputy managing director come after a flurry of data suggested inflation in the US, Europe and other economies might have peaked, as energy prices fall from recent highs and the cost of goods such as home appliances and used cars starts to decline.
Chief among Gopinath’s concerns is the continued resilience of the US labour market, which as of the most recent data added on average roughly 400,000 jobs each month in 2022. The unemployment rate still hovers near historic lows and an acute worker shortage has helped to push wage increases to a level that is far too high for the Fed to hit its 2 per cent inflation target.
Gopinath said it was “important” for the central bank to “maintain restrictive monetary policy” until there was a “very definite, durable decline in inflation” that was evident in wages and sectors not related to food or energy.
Despite fears among some economists and leftwing politicians that the Fed has already raised rates too aggressively, Gopinath said it was “hard” to argue that officials had tightened too much.
Gopinath backed the Fed’s benchmark rate rising to about 5 per cent and staying there throughout this year, in an effective endorsement of the latest “dot plot” projections from US central bank officials....
....MUCH MORE
Confession of bias toward the writer from October 2019's The FT's Colby Smith: "US Federal Reserve rate decision: 4 things to watch":
I'm a reasonably astute talent spotter, which pays dividends when dodging the entreaties of the Ponzi peeps, and said this about Ms Smith back in February:
The FT's Colby Smith Is Doing Actual Financial Journalism: China, China, China
A quick tour of finance media shows so many of the players becoming nothing more than opinion platforms. I won't name names but our astute (and surprisingly attractive in so many ways) readers could infer their identities by our lack of linkage.
Who needs opinions in biz news? Readers want facts from which they can form their own opinions because, let's face it, OpEds have the lowest barriers to entry of any genre. Everybody can do it.
And that's my opinion.
Previously in fanboi, one example among many....(after the jumps)*
Here's Colby via FT Alphaville's sidebar:...
A couple of the commenters on the headline piece seem to get it as well:
"Despite fears among some economists and leftwing politicians" - Sorry but this line is only a tad misleading. Cathie Wood, Jeremy Speigel and Robert Reich are all arguing the Fed has gone too far. Basically the full range of voices across the political spectrum. I have no doubt there are legions of "right wing" politicians also making the same argument. This line gives the wrongful impression that only small clutch of "loonies" are arguing against the Fed which is patently untrue. I'm not defending Wood, Speigel or Reich. I'm simply making the point that the reporting style is misleading.
***
‘+ those whose tech investments depends on low rates’ would suited better, but the original comment isn’t that far wrong…***Equity and bond markets want the party to continue. Some believe the Fed will lose nerve and cave in, some want the Fed to lose nerve and cut wcause it suits their investments and pocket books. Regardless, they all think the punch bowl will be filled again by the Fed.The sad part is that all of this has very real and direct consequences for the regular folks in the real world but the honchos playing with other people's money and partying in gilded mansions, connection to the reality never existed and is all about more moolah.***Controlling (aka managing) the economy with interest rates is like making someone fall in love with you under a spell, it is artificial, fake, unreal. They swing the wand and keep interest rates low for decades, hoping for a miracle, but it didn’t happen. Technology increased but productivity remained low. Wealth transferred from the middle class to the rich. Then they swing the wand the other way, not because there were organic problems in the economy, but because intentional geopolitical and foreign policy moves (trade barriers, war, decoupling) are now part of the equation. Seems like Fed has to constantly play the role of cleanup after the mess created by policy makers. What good are any analysis when the Fed policy goals are predetermined, short term focused, and driven by chasing their own tails.
Is that right? Seems outrageous.***Are they free range?It’s cropping up quite a bit on SM.Google “$9 eggs”******What type of bird ?***Faberge'?
