This is so stupid it’s special. Because we’ve massively increased our part-time jobs, the fed may end their printing sooner, rather than later.
The beginning of the end of the Federal Reserve’s massive bond-buying program might come sooner than many investors think if recent gains in the U.S. labor market do not prove fleeting…..
The marked improvement in the labor market since the U.S. central bank began its third round of quantitative easing, or QE3, has added an edge to calls by some policy hawks to dial down the stimulus. ……
“We could reduce somewhat the pace of our securities purchases, perhaps as early as this summer,” San Francisco Federal Reserve Bank President John Williams said on Thursday, adding that his view is that summer begins in mid-June.
The Fed’s balance sheet has swelled to some $3.3 trillion and officials have been debating whether this risks igniting future inflation or blowing up asset bubbles, even as they seek to help a tepid economic recovery.
Well, maybe not…….
Most economists do not expect a tapering of bond buying until later in the year, in part because of weak readings on inflation.
But the factory sector looks headed for a third straight monthly decline and most forecasters expect the economy to expand at only about a 2 percent annual rate in the second quarter. Growth of more than 2.5 percent over several quarters is generally needed to lower the still high jobless rate.
Inflation has also slowed, which is a key reason most Wall Street economists are betting the central bank stays the course for a few more months. Consumer prices rose just 1.1 percent in the year through April, well below the Fed’s 2 percent goal.
You see, the Fed thinks that more part-time jobs means that our job situation is easing. So maybe we can quit debasing our currency soon. OTOH, our inflation rate isn’t high enough. Apparently they prefer an inflation rate much closer to our GDP growth. Afraid someone will gain value, I suppose.
The last jobs report showed more part-time job gains than the total job gains. We actually lost on total full-time jobs. But, the Feds think that’s a good thing. Which makes total sense if you think our inflation rate should equal the GDP growth.
Yes Ben, it makes my head hurt, too.
You can read more here.