How Returning Workers Saved The US Economy… For Now

The US ‘immaculate disinflation’ has run its course, given that labour force participation is topping out. This leaves the Fed with a dilemma. Settle for price inflation stabilising at 3 percent, and cut rates early to avoid higher unemployment. Or, not cut rates early and go the final mile to 2 percent price inflation, at the risk of higher unemployment. We discuss which way the Fed is likely to tilt, and the investment implications. Plus: China is oversold while Japan is overbought.