Non-farm payrolls report shows everything Yellen believed was right via ForexLive

Fed fears soothed by middling jobs report, flat wages

What the hawks believed:

Wage inflation is closer than believed because most of the people who have left the workforce aren't coming back.

What Yellen and the doves believed:

The improving jobs picture will bring more people back into the labor force and restrain wage inflation.

What happened today:

The participation rate rose and wage inflation was flat, which is evidence that Yellen was right.

What it means:

Before the report, the Fed gave a nod to the inflation hawks in the FOMC statement by saying ” Inflation has moved somewhat closer to the Committee's longer-run objective.” That sparked fears about higher interest rates because of inflation and added a special focus on avg hourly earnings in the payrolls report. But earnings (and hours) were flat.

Ultimately the US dollar is still a good place to be because the Fed will raise interest rates before others. I think a lot of people are asking the wrong question; rather than worrying about inflation, they should be asking if the Fed should move rates up to 1.00% to counteract some risks in the financial system.

Yellen's going to pull a Cheney and shoot Plosser right in the face

posted via ForexLive