ECB leads the big parade, Fed strolls the other way
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- 26 Mar 2020
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The impact will for the most part not be seen in Thursday's data, but some are sceptical that anything will change soon, and another fall in prices will do little to encourage a belief that things are on the mend.
"Most concerning (in the global outlook) is the renewed deterioration in the inflation outlook in the euro area and Japan," Barclays economist Christian Keller said in a note.
"Oil and other transitory factors play a role, but second-round effects and worsening expectations can turn this into a persistent trend, moving the 2 percent inflation targets further out of reach."
The U.S. payroll figure, meanwhile, is expected to come in at 200,000 new jobs - which is less than the previous month's 242,000 but still solid in terms of the past six years or so.
The issue here is not so much jobs, given that the U.S. unemployment rate is a relatively low 4.9 percent. Rather, it is whether the economic climate is conducive to another Fed interest rate hike.
There have been some mixed messages lately. Fed chair Janet Yellen sounded surprisingly dovish to some after the March 16 rate meeting but, since then, other policy makers have been pretty forceful, leading to expectations of at least two more hikes this year.
Philadelphia Fed President Patrick Harker, for example, has said his colleagues need to "get on with it" and raise rates again.
How the jobs data plays into that was clear from the Fed's last policy statement on March 16.
"A range of recent indicators, including strong job gains, points to additional strengthening of the labour market," it said, adding that inflation had also picked up.
The ECB should be so lucky.
