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The Risk Of Flying Blind

Jerome Powell's Job is difficult enough. The at the Limit of the current US economy, which has for years nursed him back to health with a flood of money special same, to deny them a "cloth" now, without the economic for the wealthy, is for a President of the Federal Reserve (Fed) of the trickiest balancing act of all. 2019 will be for him and the US Central Bank for the key year: After four interest rate increases in the last year, each of the other reins tightening might be too much and the mood of the economic and stock market actors on the masses of dampen.

In this tense Situation can be Powell all the options. If and when it comes to further Interest rate hikes, the Central Bank chief of the continuously incoming economic data. The talk is of a data-dependent monetary policy. So far, So good. But what if the Federal Reserve series on all of the available figures and statistics can draw?

Missing tesserae

this is Precisely the guardian of the currency, in the United States now faced. The partial stoppage of the Federal public administration that has been going on for a good three weeks, no longer has the consequence that different data of the suspended Ministry employees collected and published will be recycled. Powell has addressed the situation last week, in a speech before the economic club in Washington: Should be a continuation of the Shutdown for much longer, "we will have a less clear picture of the economy." Without the usual restraint of a note formulated by bankers, i.e., The Federal Reserve must be poking around in the fog and this is an economically highly delicate time.

Particularly sensitive to the US monetary authorities, but also all other economic observers – will be hit by the closure of the Department of Commerce. Anxiously waited for you last week about the November Figures for foreign trade of the United States, after in the previous month, the highest trade deficit for a decade, reported. They were also published as little as updated information on the country's industrial new orders and the budget deficit on the Federal level.

this week the publication of the latest Figures would be for retail, to the inventories of the company and to the start of construction for houses. All of them are important mosaic pieces for experts to get a picture of the health of the overall economy. The standstill up to the month continue to be in the end – for which some evidence is for the time being, know no one, how strong the US economy grew in the final quarter of 2018. The Ministry of Commerce is also the price index of personal consumption expenditures, the inflation size to which the Fed is their special focus.

Open view on the labour market

Since the financing of the Ministry of labour is still backed up to September, are the Central bankers, and economic researchers are not entirely lost. Until further notice, the monthly publication of the (classical) consumer price index, and of course, the labour market data is thus secured. It was different once: on the Occasion of the shutdown of 2013, the Ministry of labour was forced to close its doors.

The prospect of monetary policy Decisions without the latest Numbers on unemployment, was the then Central Bank boss, Ben Bernanke, so unpleasant that he had to examine whether the Fed could take over the creation of the labour market, report on exceptional your Budget. Of lawyers from the government, he got to hear such a request will not be accepted.

it is a very good, important economic indicators in the United States are published by private institutions, such as, for example, of the University of Michigan collected the consumer sentiment and the purchasing Manager index created by the Institute for Supply Management. Jerome Powell and his Fed colleagues don't have to get so on a blind flight.

stay But the longer you Central economic data is withheld, the more clouded your view. And the more it will decide the risk of Failure, which can plunge the stock markets into new turmoil.

(editing Tamedia)

Created: 14.01.2019, 19:53 PM

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