Does The Federal Reserve Start A New Round Of Monetary Tightening?

In August this year, the unemployment rate in the United States dropped to 5.1%, making the Fed's prediction of the non-accelerating inflation rate of unemployment (NAIRU) converge from 5% to 5.2%.

Monetary policy makers believe that 5% is the lowest unemployment rate before inflation pressures begin to rise in the United States.

The picture of the recession is disappearing at an alarming rate, although a series of indicators on the health of the labour market indicate that work remains to be done.

Some economists and analysts believe that with the tightening of the monetary policy cycle of the Federal Reserve, there are good reasons for the effective response of the US economy: many suppressed activities in the real estate market will drive the market forward.

As the investment of residents increases, the US economy will not lose its growth momentum.

Back in the 40s of last century, when the real estate market had enough room for growth, the Fed, as the Central Bank of the United States, never entered the stage of tight monetary policy.

The collapse of the real estate bubble has forced the activity in this field to be suppressed. Even from the historical rearview mirror, the great recession has gradually left us.

David Doyle, a Macquarie analyst, found that in the second quarter of 2015, the proportion of residents investing in nominal GDP reached 3.34%, much lower than its 4.56% long-term average.

At least since 1970, when the residents invested in the GDP's standard deviation of less than 1 of their long-term mean, the Fed has never adopted a series of interest rate raising measures.

David Doyle wrote in the analysis: "when the proportion of residents investing in GDP is very low, enterprises will enter the expansion cycle.

When the proportion of residents investing in GDP accelerates, the recession usually happens.

Although construction activities have great room for improvement, the lack of workers also brings certain uncertainty.

Neil Dutta, head of the US economy, Renaissance Macro Research, a market research firm, points out that the relative strength of the labor market and the real estate market has rendered the economy unusually active.

Neil Dutta said: "interestingly, when the labour market is approaching full employment, the real estate market will show an accelerating trend."

Neil Dutta points out that the shortage of construction workers can be solved by arranging mineral workers to raise their pay level, which will also help attract more labor force.

In a recent interview with Bloomberg TV, Conor Sen, portfolio manager of New River Investment, said that it is expected that in the next 10 to 15 years,

The US housing market will grow strongly as families begin to pform and from renting to homeownership.

At the same time, it is found that the proportion of single family housing starts at the age of the population (25-54 years old) will remain at the level of pressure.

Assuming that since 1985, the proportion of the number of single family housing starts and the number of part-time jobs of the residents is at an average level, if the normal level of the number of single family housing starts is 1 million 250 thousand, there will be more than 250 thousand workers.

Number.

Neil Dutta believes that the population will provide support for building activities. He pointed out that those born in the 80s of the last century will be the next first suite buyers.

At the same time, it also pointed out that cyclical factors such as the relaxation of loan standards and the rise of confidence in the open business will lead to a rebound in the real estate industry.

Neil Dutta said: "when the real estate market develops ahead of time and the Americans can find jobs, the US economy will not develop in a bad direction."