Ethan Harris Hold Quotations

The markets are going to be a bit uncertain as to how to react, given that the Fed is waiting in the wings. They are all going to be looking ahead toward the FOMC meeting to see what the Fed's verdict is on the data rather than reacting as it comes out. They'll be sort of holding their breath.

Are the economic indicators looking like a recession? Absolutely. But you can still hold out hope that the war is resolved in a month or so and the economy can stage some kind of recovery.

I think we know corporate profit growth can't stay at the rate we've seen in recent quarters. They (employers) have been squeezing the work force pretty aggressively, squeezing productivity out of workers and holding the line on wages. It's a matter of how much corporate profits slow down.

My rule of thumb is to look at both the household and payroll surveys together, giving three-quarters weight to the payroll survey and one quarter to the household survey.

They keep fiddling with the language, and the general tone of the directive keeps getting a little less dovish. Being 'patient' sounds a little less like they're keeping rates on hold than a 'considerable period' -- though you'd need to study a dictionary closely to figure that out.

The main thing holding back the economy in the past year and a half has been a lack of business confidence, and now we're seeing these surveys with a fairly optimistic take on the economy. The non-manufacturing survey certainly reflects the general increase in confidence, and that's a self-fulfilling thing.

We've gone from a period where there was a reasonable chance the Fed might cut rates just four months ago to one in which the Fed is very much comfortably just sitting on hold for now.