The new issue of the FRB of Kansas City's Economic Review has an article,
which I've only just skimmed so far, arguing that full employment should
now be seen as 6 1/4% (old method of calculating unemployment, that is;
new method would be around 6 1/2 give or take a few basis points). That
means we're real close! Doesn't it feel good and prosperous? When this was
reported on the newswires a couple of weeks ago the bond market went nuts.
Rational observers may see no inflation here or abroad but the bond market
is driven by sentiment not rational argument. We can talk ourselves blue
in the face and they won't listen. Here's what passes for consensus
thinking in the bond pits and on the trading desks: Clinton is a
socialist, the economy is too strong, and the Fed should squeeze. For
this, people "earn" six and seven figure salaries.
Doug
Doug Henwood [[EMAIL PROTECTED]]
Left Business Observer
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