Federal Reserve Chair Janet Yellen and her international counterparts are suffering from a case of what psychologists call confirmation bias: They keep insisting inflation will accelerate even as it continues to ebb.
Federal Reserve Governor Jeremy Stein endorsed a warning by economists that raising the main interest rate may cause a financial-market convulsion similar to the “tantrum” that occurred last year after the Fed said it was considering trimming its bond purchase program.
‘Disappointing’ job gains will prevent the U.S. economy from growing as much as previously thought, according to Ethan Harris , head of North America economics at Bank of America-Merrill Lynch Global Research in New York.
Ethan Harris, former chief U.S. economist at Lehman Brothers Holdings Inc., recalls packing his family photos and top research into a suitcase five years ago on the Friday before the company went under.
Gains in consumer spending probably continued to drive the U.S. economic expansion at the end of 2013 as sales at non-auto retailers climbed during the holidays. Elsewhere, inflation in the U.K. probably held at a four-year low in December, Brazil’s central bank may slow the pace of monetary tightening, and Australia’s employment growth cooled.