Jobs numbers are coming in hotter than expected. Consumer creditkeeps blowing away expectations.
“With a breakeven rate of unemployment around 400k on claims, as I have been advocating on Twitter, this disconnect looks to be further exacerbated in coming months,” Dutchbook writes.
The Fed getting unemployment expectations wrong can have serious consequences. It could result in the Fed easing too much for too long, for example.
On the other hand, the Fed sees this kind of data even before the markets. So perhaps it is already revising its expectations. This might be another nail in the coffin of QE3.
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