The Atlanta Fed's macroblog provides commentary and analysis on economic topics including monetary policy, macroeconomic developments, inflation, labor economics, and financial issues.

Authors for macroblog are Dave Altig, John Robertson, and other Atlanta Fed economists and researchers.

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November 07, 2005

A Preordained End To The Greenspan Years?

According to the probabilities estimated from the market for options on federal funds futures, the answer is yes:



At first blush it seems a little surprising that the unexpectedly weak October employment report had such little impact, but the market was apparently more focused on the fact that wage growth accelerated than on the tepid pace of job creation. From CNNmoney:

The critical monthly jobs report was expected to show that non-farm payrolls rose 100,000 in October, bouncing back from a hurricane-induced loss of 35,000 in September.

"Overall, in the short term this is not going to deter the Fed from continuing its measured rate tightening campaign," Alex Beuzelin, a currency analyst at Ruesch International, told Reuters.

For investors, the most attention-grabbing number in the report turned out to be the 0.5 percent increase in hourly wages. That was the strongest gain in wage growth since February 2003. Analysts said the Federal Reserve's policy-makers could see it as an inflation threat.

Before the report, markets had been driven by Fed Chairman's Alan Greenspan's concerns about inflation.

Up soon: A first glimpse at the market's take on the beginning of the post-Greenspan era.

Here is the data from the pictures above:
Download implied_pdf_december_110405.xls
Download implied_pdf_january_110405.xls
Download Imp_pdf_slides_for_blog_110405.ppt

November 7, 2005 in Fed Funds Futures | Permalink


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