US Economics Focus Inflation: The next 20 years Inflation has been unusually stable over the past decade at a relatively low level, but there is no guarantee that the status quo will be maintained in the long term. A slide into deflation or a... 11th December 2017 · 1 min read
US Economics Focus Prime-age participation has further to rise The share of people aged 25 to 54 who are in the labour force is likely to rise further over the coming years, as labour market conditions continue to tighten and disability rates drop back... 4th October 2017 · 1 min read
US Economics Focus Is it Amazon’s fault that the Fed can’t hit its inflation target? The shift to online sales is having a transformative effect on the retail industry, but does not explain the weakness in core inflation, either this year specifically or the Fed’s more general failure... 21st August 2017 · 1 min read
US Economics Focus Next recession only a few years away We expect the current economic expansion to continue for the next year or two, by which time it will be the longest on record. But all expansions come to an end, and the rise in interest rates we... 16th August 2017 · 1 min read
US Economics Focus Is the Fed nearly done raising interest rates? The markets remain sceptical that the Fed will continue to normalise interest rates over the next couple of years. But even with inflation still below target, the simple policy rules that the Fed... 20th July 2017 · 1 min read
US Economics Focus Has the natural unemployment rate fallen? A decline in frictional unemployment and shifts in the composition of the labour force, which is now on average older and better educated, mean that the so-called natural unemployment rate has fallen... 13th June 2017 · 1 min read
US Economics Focus What explains the recent drop back in core inflation? The recent weakness in core CPI inflation in March and April has forced us to revise down our inflation forecasts for the next couple of years. Even if the recent drop in the price of cell phone plans... 16th May 2017 · 1 min read
US Economics Focus Will tax cuts boost sustainable GDP growth to 3 percent? There is little evidence to support the claim by Treasury Secretary Steven Mnuchin that tax cuts would pay for themselves by boosting economic growth to 3% or even higher, particularly not when the... 11th May 2017 · 1 min read
US Economics Focus Fed may not need to reduce its Treasury holdings after all After hiking the fed funds rate at both the June and September FOMC meetings, the Fed will begin to phase out the reinvestment of maturing principal on its asset holdings at the December meeting. A... 12th April 2017 · 1 min read
US Economics Focus Can Trump make American manufacturing great again? Globalisation has undoubtedly played some role in the loss of five million US manufacturing jobs over the past 15 years. But the evidence suggests that rapid productivity growth driven by automation... 11th April 2017 · 1 min read
US Economics Focus Will the immigration crackdown hit economic growth? President Donald Trump’s revised travel ban will have little impact on the wider economy. But his plans for a broader crackdown on immigration, which also include building a wall on the Mexican border... 7th March 2017 · 1 min read
US Economics Focus Border adjustment: the good, the bad and the ugly Although President-elect Donald Trump is concerned it would be “too complicated”, the House Republicans’ proposal to transform the corporate tax into a so-called destination based cash flow tax (DBCFT... 18th January 2017 · 1 min read
US Economics Focus The election and its implications for the economy and markets The most likely outcome of the elections on November 8 th is that Hillary Clinton will be the next President with the Republicans maintaining control of both the House and Senate. But we wouldn’t... 13th April 2016 · 1 min read
US Economics Focus A closer look at financial conditions Financial conditions have tightened in recent months, as the dollar has continued to trend higher, corporate credit spreads have widened and stock markets have suffered a correction. Nevertheless... 11th February 2016 · 1 min read
US Economics Focus Participation rate will continue to fall The decline in the participation rate is almost entirely due to structural factors and there is little prospect of a rebound in the next few years. The downward trend in the participation rate... 20th October 2015 · 1 min read
US Economics Focus Did the US recovery just die without warning? We still believe that the unseasonably cold winter in the Northeast together with some strange seasonal quirks can explain a lot of the weakness in first-quarter GDP growth. It is true that the... 21st May 2015 · 1 min read
