FOMC Minutes of April 26-27 released today; new overtime rules announced today

Discussion in 'General Trading Discussion' started by baudwalk, May 18, 2016.

  1. baudwalk

    baudwalk Senior Investor

    May 2015
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    The FOMC Minutes were released thIs afternoon. My take on it? Less of a concern on the global front, but a softness in the inflation rate and some of measure monitored. Note that the vote to continue the federal funds rate at the current level had a dissent. Read the minutes for yourself and see what you think. Frankly, I find a bit incredulous that, given the decade-long history, that the FOMC can continue to rattle the markets.

    FWIW, I think the more disturbing, mostly ignored, number continues to be the abysmally low labor participation rate of less than 63%. See the data on the Bureau of Labor Statistics website.

    And the new DOL overtime pay rule announced by VP Biden today reads like good news on the surface. I expect the unemployment rate to go up as the marginal salaried employee working a few extra hours a week may well be affected. Small business owners may well find it cheaper to replace the full time employee with two part time workers who would not be entitled to medical and other full time benefits. The trick here? The rule won't materially affect business owners until after the next presidential election. Meanwhile, working voters may well be fooled by the seemingly good news and vote for the liberal progressive Democratics (and Clinton) without looking at the larger picture.

    I have to wonder if the FOMC and the DOL are on the same page, or if the White House czars are stirring the pot to create chaos and mayhem. (Add in the $15/hour disruptive bit to the economic melting pot.)

    Can't make this up.
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

    Feb 2014
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    It's a shame that a large % of the US population doesn't understand basic economics, and believe that more than doubling the min wage and forcing small businesses to provide "free" healthcare are net positives. It's also alarming that so many adults expect "free" college and other goodies. Back in my day, if you wanted to go to college, you worked, applied for scholarships (and even needs-based financial aid), or you joined the military and got the GI bill.

    I remember actually being turned down for a Pel grant some 25 years ago because I made too much money as a 21 year old grocery store employee who worked full time for barely $7 an hour. It kinda disappointed me at the time, but looking back it is a source of great pride.
    Last edited: May 19, 2016

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