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There is a 0% chance that the Fed will bump interest rates when they meet next week.  But don’t get too complacent, Janet Yellen & Co. are still committed to two more hikes this year.  The timing of these exercises in “right sizing” the cost to borrow money will be dependent on various measures of economic growth. A biggie is GDP.  The first reading of our collective output for the first quarter showed a paltry 0.7% increase.  The Fed wants to see 2.0%-2.5% and many economists believe that 3.0% should be the minimum expectation for the next few years.  Zero point seven is closer to 0 than it is to 2.  Unless the Fed wants to blindside the American people, there will be no adjustment to the Cost of Funds Index next week.

Speaking of the Fed, former Fed Chair Alan Greenspan’s favorite measure of inflation was the Employment Cost Index, which, just like it sounds, measures the cost associated with keeping a person on the payroll.  While the latest calculations published this morning show that this burden for employers has risen 0.8% last quarter, it should be more than offset by the proposal of the corporate tax rate dropping from 35% to 15% next year.