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
US Economics Focus Deflation: Can "it" happen here after all? The collapse in global crude oil prices means that consumer price inflation will fall below zero in January and could remain in negative territory for most of the next 12 months. Nevertheless, the... 8th January 2015 · 1 min read
US Economics Focus Fed's new monetary tools should ensure a smooth rate lift-off When the time comes next year to begin normalising interest rates, we believe that, using the interest on excess reserves (IOER) rate and its new liquidity management tools, the Fed will be able to... 19th November 2014 · 1 min read
US Economics Focus Growing pile of foreign cash won’t help the domestic economy The growing pile of cash held abroad by US firms, which has now reached more than $2trn, or 12% of GDP, is unlikely to provide much of a boost to the economy, not least because the prospects of that... 12th November 2014 · 1 min read
UK Economics Focus How do the US and UK monetary policy outlooks differ? Although we anticipate that the first interest rate hikes in both the US and the UK will come around the same time, towards the end of the first quarter next year, we expect the subsequent pace of... 8th October 2014 · 1 min read
US Economics Focus Dwindling slack will soon lead to surge in wage growth We believe that the slack in the labour market is dwindling and we expect a resulting accelerationin wage growth to be one of the big stories over the next 12 months. Unless productivity growth breaks... 12th August 2014 · 1 min read
