US Economics Update Rebound in production has much further to run The recovery in manufacturing output has been relatively muted up to this point but, with goods consumption surging and, as a result, inventories now looking very lean for this stage in the cycle, we... 2nd September 2020 · 2 mins read
US Economics Update Fed adopts average inflation target Chair Jerome Powell announced this morning that the Fed will be adopting what he described as a “flexible form of average inflation targeting”, which we expect will trigger additional policy stimulus... 27th August 2020 · 3 mins read
US Economics Update Monetary Indicators Monitor (Jul.) The annual growth rates of the main monetary aggregates remain unusually elevated, but the growth rate of bank loans has fallen back. Furthermore, although those monetary aggregates are significantly... 27th August 2020 · 3 mins read
US Economics Update Fed plotting its next steps The Fed is very close to introducing changes to its policy framework that would explicitly allow for an overshoot of the inflation target to compensate for the undershoot over the past decade. Those... 25th August 2020 · 7 mins read
US Economics Update Consumption to keep rising regardless of fiscal delay Even though Congress failed to prevent the $600 additional UI payments from expiring last Friday, we still expect a deal in the coming weeks which will offset the continued hit to incomes from the... 3rd August 2020 · 2 mins read
US Economics Update Fed still likely to provide more accommodation While the Fed left its policy settings unchanged and opted not to strengthen its forward guidance at the conclusion of its meeting today, its downbeat assessment of the economic outlook still suggests... 29th July 2020 · 3 mins read
US Economics Update The lasting impact of the virus on the labour market Even though unemployment is likely to continue declining faster than in previous recoveries, we still expect the unemployment rate to remain elevated for years, falling to 8.7% by the end of 2020 and... 16th July 2020 · 4 mins read
US Economics Update Pull-back in activity only partly due to new restrictions The high-frequency data suggest renewed fears about the coronavirus are starting to weigh on consumption even in states that haven’t moved to reimpose restrictions, reinforcing our view that the pace... 8th July 2020 · 2 mins read
US Economics Update Fed may have to ramp up Treasury purchases again The Fed’s balance sheet has started to shrink again, as the emergency liquidity measures deployed at the height of the crisis have started to wind down, the pace of Treasury purchases has slowed... 23rd June 2020 · 4 mins read
US Economics Update Post-lockdown recovery exceeding low expectations The unexpected strength of the bounce-back in retail sales in May could mean that we are underestimating the potential for economic activity to return to pre-pandemic levels soon. Nevertheless... 18th June 2020 · 4 mins read
US Economics Update Biden edges ahead in election race A lot could still change over the next five months but, as things stand, Joe Biden appears to be the favourite to win November’s presidential election. Biden’s policies are more moderate than some of... 17th June 2020 · 4 mins read
US Economics Update Rise in infections won’t stop economy rebounding The rise in new infections in a handful of states across the South and West is nothing like the national surge we saw in late-March and early April that triggered widespread lockdowns. It does... 17th June 2020 · 3 mins read
US Economics Update Surge in corporate debt could weigh on recovery The dramatic pandemic-related rise in government debt has attracted most of the attention, but it is the surge in corporate debt that could exert a bigger drag on the economic recovery in coming years... 15th June 2020 · 4 mins read
US Economics Update Is the end of the $600 UI payments a major risk? The potential expiry of the expanded $600 weekly unemployment insurance payments at the end of July could weigh on consumption. But those payments look more likely to see at least a partial extension... 15th June 2020 · 3 mins read
US Economics Update Fed takes first steps to strengthen forward guidance The Fed left its policy stance broadly unchanged at the conclusion of today’s FOMC meeting, but it did strengthen its forward guidance a little – by publishing interest rate projections that show... 10th June 2020 · 3 mins read
US Economics Update How did we get employment so badly wrong? The unexpected 2.5 million rebound in nonfarm payroll employment in May, against a consensus expectation of a 7.5 million decline, has generated a lot of speculation that the figures were either... 9th June 2020 · 6 mins read
