I am a product of the ’80’s, so when I hear the word “patience”, it’s immediately followed by melodic whistling, gentle guitar strumming, and the aroma of smouldering tobacco. Experiencing that song was the 20th century’s version of zen.
But patience is also the current buzzword at the Fed regarding the timing of interest rate hikes, particularly because their favorite measure of inflation, Personal Consumption Expenditures, is still registering at 1.9%. So close, yet still so far away from their elusive 2.0% threshold. (Hey, at least we’re not in Venezuela, I say!).
Germany and Japan are also both experiencing low inflation and continuing low interest rates (1st world problems). Add to that the concern over global trade, insurmountable budget deficits, and general political unrest, and you have a good formula for the FOMC backpedaling away from any “tightening” they had previously been considering. There will be a solid half dozen Fed Governors on the speaking circuit at various junkets today, attempting to convey their rebirthed trepidation over constricting commerce . “This is what it sounds like, when the doves cry.”