How a Hot Labor Market and a Shooting War Complicate the Fed’s Decision-Making Process

Published on
March 3rd, 2022
Duration
57 minutes

January FOMC Minutes Reveal a Central Bank at a Crossroads


How a Hot Labor Market and a Shooting War Complicate the Fed’s Decision-Making Process

Live ·
Featuring Peter Boockvar and Maggie Lake

Published on: March 3rd, 2022 • Duration: 57 minutes

The Federal Open Market Committee (FOMC) will meet March 15-16 amid the fastest pace of increase for domestic wholesale and retail prices in 40 years and perhaps the greatest geopolitical crisis in nearly 80 years. February’s nonfarm payrolls report came in significantly above the consensus estimate of 422,500 at 678,000, and the unemployment rate ticked down to 3.8%. It’s a tight labor market, and Russia’s invasion of Ukraine only exacerbates inflationary pressures, with the former a major exporter of energy commodities and the latter a major exporter of grains. As Peter Boockvar notes, while we don’t know what we’ll wake up to vis a vis events on the ground in Eastern Europe, the tone of financial markets can now be summed up by watching the prices of oil, wheat, and European natural gas. Boockvar, the chief investment officer of Bleakley Advisory Group, joins Real Vision’s Maggie Lake to discuss the FOMC’s options in the face of such fraught circumstances. Federal Reserve Chair Jerome Powell said during recent Congressional testimony that he’d recommend a 25-basis-point increase to the target federal funds rate. How will markets respond? Does the February nonfarm payrolls report make a difference? Boockvar will be taking live questions from Real Vision Plus members on the Fed as well as the economic consequences of the Russia-Ukraine war.

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