The Old Flip/Flop

First he says he will (raise rates), then he says he won’t, and the 10-year yield jumps to 3 1/4% and then drops below 2.70%.  Now Chair Powell must consider the implications of a second consecutive blockbuster employment report.  Big increases in payroll and household employment and in the labor force.  The economy appears to be much healthier than the hand-wringers at the Fed are suggesting.  Will Mr. Powell now be forced to warn of the possibility of a rate increase in March or May?  Or, are the FOMC members not concerned that they might be too timid in the face of full employment.  The markets are likely to continue to be plagued by swings in the outlook for Fed policy.

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