Fed officials ... likely anticipated some fallout in fixed income markets, ... We believe ... that Fed officials wanted to signal a greater probability of tightening in 2004 than had been priced into markets.
More Quotes from Ethan Harris:
The main thing holding back the economy in the past year and a half has been a lack of business confidence, and now we're seeing these surveys with a fairly optimistic take on the economy. The non-manufacturing survey certainly reflects the general increase in confidence, and that's a self-fulfilling thing.Ethan Harris
Imagine you're a bank. The corporate sector isn't interested in borrowing, so you can't lend to it. So where do you go Well, mortgages. They pay a reasonable rate. They're seen as a safe investment. Load up on mortgage-backed securities.
Ethan Harris
We think inflation is going to remain benign going forward.
Ethan Harris
We've been trying to see whether the improvement of the economy and financial market will carry the day in terms of consumer confidence, or if worries about labor will dominate. It looks like the 'glass-half-full' view is winning.
Ethan Harris
We think the ISM services number is one of the worst monthly pieces of data there are. On a month-to-month basis, it has no correlation with service sector employment, and on a quarter to quarter basis, it has no correlation with service sector gross domestic product.
Ethan Harris
You've had obviously a rise in gasoline prices, which is the visible price in the economy, ... There's (also) a tendency of the public to look at the unemployment rate that actually rose in March, while Wall Street looks at payrolls (which showed a large jump in the number of people working.)
Ethan Harris
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