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Rates Spark: Fed with scepticism
The Fed today should step up its dovish warning, at a time the prospects for the US employment market are worsening. According to our economics team, recent jobless claims indicate December could see negative payroll growth. Add to this fresh local lockdowns to slow the spread of a rampant Covid pandemic and the case for stimulus is clear. The issue is that, for this meeting at least, the Fed is likely to defer to fiscal authorities. Not only is fiscal stimulus a more appropriate policy lever to support the economy, hopes of a deal in the coming days argue against immediate monetary policy action. Further down the ... (full story)