Dallas Fed President Robert Kaplan says that he views the labor market as “likely at or past” full employment, hinting that Kaplan may see a weaker case for lowering interest rates.
In an essay published Tuesday, Kaplan wrote that he still views the current level of interest rates as “roughly appropriate” for the U.S. economy. He added that he projects no rate changes through the end of 2020.
Kaplan said he expects “solid growth” for the year and projects the headline unemployment rate ticking down from 3.6% back to 3.5%. Kaplan also pointed to a labor force participation rate of 63.4%, the highest level since June 2013.
And this chart, my favorite:
We see that we just got hit with a doubling of the seigniorage tax. That tax makes retail banking unaffordable, hence the record rates on personal credit.
Primary dealers are not funding government, they are passing the tax down the line. It will take a recession to reduce that tax. Meanwhile the central bank cannot measure shit with this level of mismatch. You screwed up Mr. Kaplan, you have no reverse path you have engineered an irreversible, lossy compression of the pricing structure. The arrow of entropy is not reversible. We are now an economy of oil drilling and fracking.
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