Source: NY Times
Sunday, September 21, 2014
Wednesday, September 10, 2014
Federal Reserve Chair Janet Yellen has long said she remains focused on the health of the labor market, and in her most recent public comments at Jackson Hole, she said that given the current state of the labor market, there was "no simple recipe for appropriate policy in this context."
And for Gundlach, one chart makes clear why Yellen's desire to raise interest rates is most likely far less than many assume.
Wages as a percent of GDP remain near multi-decade lows, and until this trend shows any sign of improvement, Gundlach doesn't think that Yellen will want to do anything with interest rates.
Gundlach also noted that real wages for the bottom seven deciles of earners had fallen between 2007 and 2014, to which Gundlach said, "It seems tough that with so many workers losing purchasing power on a year-over-year basis, you could raise short-term interest rates."
And for Gundlach, one chart makes clear why Yellen's desire to raise interest rates is most likely far less than many assume.
Wages as a percent of GDP remain near multi-decade lows, and until this trend shows any sign of improvement, Gundlach doesn't think that Yellen will want to do anything with interest rates.
Gundlach also noted that real wages for the bottom seven deciles of earners had fallen between 2007 and 2014, to which Gundlach said, "It seems tough that with so many workers losing purchasing power on a year-over-year basis, you could raise short-term interest rates."
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