Dollars and Jens
Sunday, May 09, 2004
monetary tightening
A couple musings on fed tightening:
  1. The fed, by broadcasting that hikes in short-term rates are coming, has already triggered a run-up in longer-term rates. Some of the adjustment the economy will have to do will already have been begun by this, even though the fed probably won't hike the funds rate target until its next meeting at the end of June.
  2. China, a fairly large economy, is looking to tighten its own monetary policy, but its currency is pegged to the dollar. I would think this should have some tightening effect on the dollar economy as well.
Income to labor grew at an annualized 7% rate from March to April.

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