Ian Shepherdson Rate Quotations

He used the word 'pre-emptive,' which was the signal he used before the March 1997 rate hike.

We doubt that this report unambiguously points to slower growth ahead --but it does mean no rate hike on (Aug.) 22,

We doubt that this report unambiguously points to slower growth ahead -- but it does mean no rate hike on the 22nd.

While claims at 350,000 or so would not be a disaster, they would be consistent with (monthly) payrolls trending at only about 125,000 -- not enough to push the unemployment rate any lower.

This will doubtless shock the markets, and makes an October rate cut more likely, but it does not change the outlook for a near-term recovery, ... Falling employment, rising unemployment lag activity. These numbers reflect the second quarter economic stall.

We think Mr. Greenspan is willing to give the data a chance; it will take bad data to force an August rate hike,

The trend in claims has risen this year, in tandem with the clear drop in business confidence in the period before the war with Iraq. If claims are sustained at this level they will signal an acceleration in the rate of net job losses recorded in the payroll numbers.

Preparing the markets for a rate hike is a process in which the Fed gradually has to back away from its unduly pessimistic stance of recent months. This will take some time, but the process is now underway.

This is a sign that the committee is beginning to think aloud about shifting to a more neutral position - but the forecast of significantly slower growth will have to come first, ... For now, the elevated headline inflation rate and the tight pool of available labor remain bigger concerns, so the Fed's guard is still up.

It seems likely that these numbers will be seen as significantly increasing the chance of an August rate hike.

It now seems appropriate to start thinking about a fed funds rate as low as 4 percent by the summer.

The Fed's chief worry is still the labor market. So long as the unemployment rate does not fall further, and clear signs of consumer slowed own emerge, the Fed will be able to leave rates on hold.

The Fed's chief worry is still the labor market, ... So long as the unemployment rate does not fall further, and clear signs of consumer slowed own emerge, the Fed will be able to leave rates on hold.

In the short-term, these data will reinforce the impression that the housing market is proving resilient in the face of higher mortgage rates, ... it will not last, because the current trend in home sales is not high enough to support this rate of house building in the medium-term.

Claims are a good leading indicator of the unemployment rate; these data suggest the rate will be nudging 4% by mid-summer.

If February is broadly similar, a March 28 rate hike is assured. The May meeting's risk is rising.

If claims remain at their current level, we could expect the unemployment rate to be down to 4 percent or so by mid-summer.