Friday, February 6, 2015
Employment Report - United States Is Decoupling
The January Employment Situation Report was strong, in line with the baseline Fed forecast of a June rate hike. So far, the United States economy has shrugged off the weakness seen in other countries. On past form, the Fed will hike rates, and ignore those overseas jitters (assuming that there is no serious deterioration in the data; mediocre data will not be enough to stop rate hikes). That said, every time the Fed has ignored overseas developments, a financial crisis has forced them to reverse course. The question is how long it will take for that financial crisis to materialise.
Update: I do not know how significant the Eurogroup statement that came out this afternoon is; it could just be posturing. If not, the answer to the question above may be "sooner than I thought",