The market says you're all of a sudden ready to cut again after the February jobs report showing down 92,000 jobs.
Steve Liesman
Mary Daly
No one month of data is a decision month of data. We have to keep our eye on both the labor market and inflation printing above target with oil prices rising.
What's the way to think about this? Blockbuster number in January and now blockbuster negative number in February.
Steve Liesman
Mary Daly
Average the two and keep watching. The job numbers are not a clear read but also not a wrong read.
Should monetary policy respond to that low hiring situation by being less restrictive?
Steve Liesman
Mary Daly
It's a very different universe than when we have inflation below target. Right now we have inflation printing above target for some time.
It was printing above inflation before $85 oil too.
Steve Liesman
Mary Daly
The thing with the oil is how long will that last. Consumers feel it immediately at the gas.
When people feel crappy about the job market, they may leave the labor force, participation rate goes down.
Steve Liesman
Mary Daly
Absolutely. They get discouraged about prospects and don't search. Those are signals the labor market is a little weaker.
Do you worry about 4% wage increases because it's inflationary?
Steve Liesman
Mary Daly
Wages are inflation plus productivity growth. Productivity growth is higher so wage growth isn't outsized.
If you had to put your finger on one of the mandates, which is higher concern right now?
Steve Liesman
Mary Daly
At this point we have two-sided risks. The oil price shock depending on how long it lasts is a real thing.
Lessons from the 70s on oil price hikes: you just be very careful, may not hike but wouldn't cut until it worked through the system.
Steve Liesman
Mary Daly
It really depends on how long the elevated oil prices continue. If conflict settles quickly and oil disruption doesn't transpire long, we'd be back to normal.