Moskow Makes Hawkish Comments

The market is taking a midday swoon as Fed governor Moskow speaks and is making hawkish comments.

He states that:

• housing is undergoing a great deal of softening;
• says core inflation may run above 2.0% for some time;
• and that inflation risks are greater than slow growth risk

This last point is one that I have been harping on for a while now. If you follow the 10-year Treasury yield, which is a much better predictor than any Fed govenor, it has been indicating that the bond market is far more worried about slowing growth than inflation.

So take Moscow's comments with a grain of salt. I see almost zero chance of the Fed raising rates at its September meeting.
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