by Bill McBride on 2/05/2015 05:17:00 PM
Thursday, February 05, 2015
Tim Duy provides a number of thoughts, and I'd like to highlight one: Fed Updates
3.) Fed ready to lower NAIRU? I have argued in the past that if the Fed is faced with ongoing slow wage growth, they would need to reassess their estimates of NAIRU. Cardiff Garcia reminded me:There is much more in Duy's post.
@TheStalwart @TimDuy Whether/extent to which Fed reverts nat-rate estimates to pre-2010 range is one of 2015's big Qs pic.twitter.com/CKieHx2zRCWhile David Wessel adds today:
— Cardiff Garcia (@CardiffGarcia) February 4, 2015
JPMorgan run the Fed's statistical model of the economy and says the NAIRU (which was 5.6%+ through 2013 data) is now down to 5%.Jim O'Sullivan from High Frequency Economics says not yet:
— David Wessel (@davidmwessel) February 5, 2015
"Hard-to-fill" @NFIB jobs series up to 26 in Jan (+1). Corroborates unempl decline, with no sign of lower #NAIRU pic.twitter.com/DVYGyGV4e6A reduction in the Fed's estimate of the natural rate of unemployment would likely mean a delayed and more gradual path of policy tightening, should of course the Fed ever get the chance to pull off the zero bound. Keep an eye on this issue!
— Jim O'Sullivan (@osullivanEcon) February 5, 2015
Posted by Bill McBride on 2/05/2015 05:17:00 PM