The thing driving service prices is wage growth, and after two years of sub-par economic growth, we've got wages decelerating. If the Fed doesn't get the economy growing at an above-trend pace in the next couple of years, deflation will arise.
Quotes about above-trend (10 Quotes)
While we look for the Fed to pause in June, we expect continued above-trend growth and inflation concerns will lead to further tightening (to 5.5) in the second half of the year.
Whether top-down or bottoms-up, the facts today point but in one direction that of sustained, significantly above-trend growth at least through the end of 2000, with virtual certainty of vigorous growth through 2001 and even the likelihood for continued expansion though 2002 as well,
The base of global growth is strengthening and broadening overseas. It looks like we're picking up the pace and we're moving back into above-trend growth rates.
Our view is that we get above-trend growth and that will cause the Fed to raise rates to 5 percent.
He will stress the nature of the initial conditions an economy at full employment likely to be growing at an above-trend rate in the first half of this year, and inflation already near the upper end of the comfort zone.
I expect the economy to rebound to above-trend growth. We just hit a soft spot in the second quarter, ... If it turns out that the economy continues to grow below trend ... if the data continue to be as weak as they have been in the past three months, with a sufficient rise in the unemployment rate, you can't rule a rate cut out.
Any additional rate increases would need to be precipitated by higher inflation or above-trend growth.
Faltering U.S. new home sales, reflecting shrinking housing affordability, call into question the notion of another year above-trend growth for U.S. consumer spending and real gross domestic product.
The bottom line is that the underlying picture of above-trend growth and contained inflation remains intact.