Economics & Growth | UK | US
Summary
• The FOMC minutes suggest a faster taper announcement at the December meeting.
• Details of the PCE release, plus easing bottlenecks, suggest it could be close to peak.
• Continued weak bargaining power of workers and substitution of capital to labour support medium-term disinflation.
• Real consumption growth could slow going forward due to stagnating real wages and an already low savings rate.
Market Implications
• A faster taper announcement would be consistent with three hikes in 2022, but these are already priced in.
Summary
• The FOMC minutes suggest a faster taper announcement at the December meeting.
• Details of the PCE release, plus easing bottlenecks, suggest it could be close to peak.
• Continued weak bargaining power of workers and substitution of capital to labour support medium-term disinflation.
• Real consumption growth could slow going forward due to stagnating real wages and an already low savings rate.
Market Implications
• A faster taper announcement would be consistent with three hikes in 2022, but these are already priced in.
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