It's Fed week and Deputy Chief US Economist joins David Wilder to discuss what to expect from the Tuesday-Wednesday FOMC meeting, including how the recent surge in long bond yields could influence the decision and accompanying language. Andrew also explains talks about the new House Speaker and whether Mike Johnson's appointment lowers the risk of a US government shutdown next month.
Plus, although it's been three weeks since Hamas’s surprise attack on Israel and financial markets have remained largely resilient. Deputy Chief Markets Economist Jonas Goltermann tells David why there hasn’t been a greater negative reaction and talks about what recent history has to say about the impact of geopolitical events like these on asset prices.
Analysis and events referenced in this episode:
GDP (Q3)
US households still the world’s spenders of last resort On its own, the stunningly-strong 4.9% annualised gain in third-quarter GDP suggests that the Fed needs to do even more to slow demand, but just
Still on course for rate cuts next year
Fed to hold rates at 5.25%-5.50%, and keep further tightening on the table… …but surging long-term Treasury yields reducing appetite for final hike Sharp decline in core inflation to see rates cut to
Has the AI productivity boom already begun?
Has the AI productivity boom already begun? New Speaker, old problems The House Republicans finally managed to elect a new Speaker this week, with the caucus eventually rallying around Mike Johnson
BoJ will probably leave yield cap unchanged for now
BoJ probably won’t tweak Yield Curve Control Media reports suggest that the Bank of Japan may tweak Yield Curve Control yet again at next week’s Board meeting. That’s certainly possible: 10-year JGB
Three key lessons on geopolitical risk and markets
The war between Hamas and Israel – and the potential for escalation to the wider region – has increased the uncertainty around the economic and financial market outlook, but in most scenarios is
Why isn’t the oil market more worried?
We think the cautious oil market reaction to the outbreak of conflict in Israel probably reflects the huge uncertainty about the eventual outcome, but also a somewhat lower “Middle East” risk premium
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