Market Reviews

Bluff or Prediction

US Federal Reserve Governor Christopher Waller spoke today on the current economic situation in the country, based on economic statistics for the past week.

He believes that the situation in the labor market is beginning to soften, and he is not surprised that the unemployment rate has risen, but does not comment on the reasons for this increase. Waller’s silence on this issue is alarming, given the magnitude of the increase in this indicator. He also notes that the overall data and statistics look pretty good, and this is in favor of the absence of a recession. Indeed, the latest reports on PMI and on the real estate market were quite good, which fueled appetite for the dollar last week.

Also, and perhaps most importantly, Christopher Waller has made it clear to market participants that interest rates will be high and will not come down until inflation stops rising. This begs the question: how did such a large number of people laid off last week come about? It turns out that it is expensive for enterprises to borrow money and they have to close with expensive resources, especially in private business. In the end, what do we have? Information presented as reality is not as real as it seems in fact for one simple reason – the “root” of the economy is always employment. Well, if the root began to rot, then what will happen to the tree?