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Friday, November 08, 2013

It's Confusing To Be the Central Bank

The masters of the universe who inhabit the central bank these days are confused.

On the one hand, the October jobs number came in on the high side of expectations. On the other hand, consumers aren't spending. What's a poor central banker to make of it?

The truth is that the government has so jiggered the data that no one really knows where the economy is really going. But, if consumers have cut back and are saving more—a trend confirmed by yesterday's GDP report—then we're heading for recession and the Fed should disavow any attempt to taper equity purchases.