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REPLAY| Monthly | Employment Conference Call|Labor Market, the Economy, the Fed—How Long Strong? – 1/6/23
Labor Market, the Economy, the Fed—How Long Strong?
Labor Market (Dec.)—How Long Strong?
- Jobs (Headline Nonfarm Payrolls)—Weak? Strong? Mixed?
- Persons Working (Hh. Survey)—Weak? Strong? Mixed?
- Unemployment Rate (Hh. Survey)—Still Essentially a Fully-Employed Labor Market or Weakening?
- Wages (Avg. Hrly. Earns.)—Cost-Push Wage Spiral? Or Not?
“Baseline Prospect”—Economy OK—“Soft-Landing?” (60% Odds)
- Recession? (25% Odds)—If One, When? Mild or Deep?
- Alternative Macro Scenarios—Fed View “Growth Recession” (10% Odds); Other (5% Odds)
- Fed Still on a
Mission! 2% Price Inflation Target “Price Stability” Locked-In
- Fed Message Clear So Pay Attention
- Fed Policy Rate Forecast—50 bps. (Feb. 1), Perhaps Some Spacing After
- No Terminal Funds Rate Until at Least 1% “Real”
Markets—Interest Rates Still Up, On Average; Dollar Mixed; Equity Market
- Funds Rate in 2023 Up to Another One Point Higher; 10 Year T-Bond Yield Up As Well
- Fair Value S&P 500 Still 3850; Range 3500 to 4200
- Earnings Uncertainty the Next Hurdle—Current DE Forecast Pre-Earnings Reports