Halister News

--FERGAL O'BRIEN

(Bloomberg) -- The deal for a short-term debt-limit suspension means the issue won’t affect Fed deliberations for the remainder of the year since the ceiling won’t have to be dealt with for months after the suspension expires, RBC economists Tom Porcelli and Jacob Oubina and strategist Michael Cloherty wrote in a note.

• After deal lapses in December, Treasury will be able again to use extraordinary measures to stay under debt-cap
  • No default risk “until relatively late in Q1”; that means ”no at-risk CUSIPS until deep into the 2018 tax refund season”
• This matters as December deadline comes just before the Fed’s meeting that month
  • Given real ”drop-dead date is much further away, we think it is unlikely to derail a rate hike at that point”
• While risk of govt shut-down may exist in December, “the Fed is unlikely to care about this event unless we see a significant reaction in financial markets”
  • The U.S. has had govt shutdowns before with “no visible impact and we expect this time will be no different”
• Thus, “as long as the data continue to cooperate, this Congressional line-in-the sand is unlikely to impact monetary policy”

To contact the reporter on this story: Liz Capo McCormick in New York at emccormick7@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Greg Chang

(Bloomberg) -- Following are forecasts for today’s economic releases as compiled by Bloomberg News.

• Productivity 1.3% q/q; range 0.9% to 1.6% (43 estimates)
• Upward revision from the preliminary estimate
• Unit Labor Costs 0.3% q/q; range 0% to 0.6% (40 estimates)
• Initial Claims 245k; range 235k to 270k (37 estimates)
• Cont. Claims 1945k; range 1945k to 1970k (3 estimates)
• Little change in latest week, as the hurricane spike is expected next week

To contact the reporter on this story: Alex Tanzi in Washington at atanzi@bloomberg.net To contact the editors responsible for this story: Alex Tanzi at atanzi@bloomberg.net Kristy Scheuble