When looking ahead to the Federal Reserve’s three predicted interest rate hikes for 2017, only wage growth data matter, strategist Boris Schlossberg told CNBC on Thursday.
“This is the only economic number you should be watching for the next three months. If wage growth isn’t there, the Fed stays still. Mark my words,” Schlossberg told “Squawk Box” one day after the central bank raised interest rates for only the second time in a decade.
Schlossberg, managing director of Forex strategy with BK Asset Management, said criticism that the Fed is behind the curve of next year’s economic outlook is unfounded.
“I think it was actually surprising to see [Fed Chairwoman Janet Yellen’s] rhetoric, which was much more hawkish than the reality on the Street. And the reason why is because the only factor that matters … is wage growth,” Schlossberg said.
“And wage growth is still not there, retail spending is still not there,” he said. “Now, [if] those two things start to go up, then yes, we’re all on board for further rate hikes. But if we don’t see that improving, I think we’re dead and done.”
In its November jobs report, the Bureau of Labor Statistics said average hourly earnings for all employees on private nonfarm payrolls declined by 3 cents to $25.89, following an 11 cent increase in October. Over the year, average hourly earnings were up 2.5 percent as of November.
source”cnbc”
