With less than an hour left until the FOMC, Nomura's co-Head of Rates Sales writes today that "at this stage of the cycle the Fed has to be either patting themselves on the back or scratching their heads. Here we are, +500bps of rate hikes later and the US economy continues to motor along." And while the inflation story is improving, "it’s still murky and fragmented within certain sectors, and one can argue the heavy lifting is still in front of us in order to return to their 2% target."
Meanwhile, on the employment side, the unemployment rate (3.6%) is sitting where it was when the Fed began the tightening cycle, well through full-employment with real wage gains still in positive territory (for the past two years) while other DM countries like the UK, Japan and Germany are down significantly (ie negative).
