Despite the strong consensus view that the U.S. is on a stronger economic footing than a year ago, and clearly working with stronger momentum than other major economies, The PunchLine's Abe Gulkowitz suggests the scary array of possible flashpoints in the U.S. and certainly overseas will continue to haunt policymakers and the markets.
U.S. labor markets have improved over the past year. Yet a range of indicators continue to point to significant underutilization and slack in U.S. labor conditions, particularly meager wage gains and adverse labor market participation rates.
Europe will not make much positive contributions to global growth in 2014, and forward trends point to numerous downside risks even for 2015. U.S. re-engagement in Iraq, and tensions in Ukraine will also punctuate the outlook with intermittent bouts of uncertainty.
Concerns about waning Chinese growth are suppressing demand for commodities, limiting Latin America’s upside and has come with a surge in the U.S. dollar.
These conflicting developments highlight the awkward challenges the Fed faces in charting a tightening posture, and in steering market expectations on the future course of interest rates.
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TPL Sep 23 14 [4]
