The fall in PCE inflation to just 0.9% in February probably marks the low point in this cycle and we suspect that the Fed will be surprised by how fast inflation rebounds over the next 18 months.

While a handful of banks “failed” the Fed’s latest stress tests, the sector as a whole has enough capital to continue lending to domestic businesses and households even if it had to absorb further...

If there is little prospect of getting the long-term unemployed, who account for an unusually large share of the overall jobless rate, back into work then wage growth could accelerate faster than the...

A rebound in medical inflation from recent 40-year lows will add to a wider strengthening in price pressures to push core PCE inflation above the Fed’s 2% target next year. This may prompt the Fed to...