Cooling Labor Market and Persistent Inflation Complicate Fed's Rate Hike Path
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Inflation remains a risk for the U.S. due to structural labor market changes like aging population. Going back to very low interest rates will be difficult.
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The U.S. economy was built on low interest rates for 10 years without inflation. Now inflation has awakened.
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Training wheels have come off the U.S. economy - businesses and consumers must adjust to higher interest rates.
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Jobs reports now feeding into Fed policy rather than just lagging indicator. Relationship between jobs and policy is more complex.
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September ADP report showed weaker than expected job growth, indicating cooling labor market. Upcoming official jobs report will provide more clues.