UNITED STATES   Data and events last week did not change expectations for a December Fed hike. The impasse continued, nonetheless, between weak inflation with a strong economy. The FOMC dismissed lasting impacts from recent natural disasters. In their view, the outlook remains firm and upbeat. There was a lengthy discussion about inflation. Nothing that changes the view that, by 2019, inflation will be at the target; that, given the lags, it calls for immediate policy action. The highlight of last week’s data was the weakness in core goods inflation: A reduction of 0.2%mom; -1.0%yoy, the lowest since Aug/2004. The core goods vs. USD disconnect continues as secular stories dominate. Meanwhile, the upbeat retail sales report led to higher Q3/GDP trackings, now at 3%saar or more. With wage growth in the 2¾-3% range the pace of disposable income growth seems firm, on track for yet another quarter of consumption-led growth. By some estimates the pace is close to the longer-run equilibrium, assuming a 2% inflation trend and productivity growth of 1-1¼%. It suggests, therefore, that the labor market is at, or close to, full employment. No major data releases are scheduled for the week. Of relevance, industrial production and speeches by … Continue reading US + Brazil Financial News (10/16)