US Economics Update Fed’s balance sheet heading back above $4trn The Fed’s move to begin purchasing $60bn of Treasury bills per month will eventually push the size of its balance sheet back up to $4trn over the coming year, not far below its $4.2trn peak. However... 16th October 2019 · 5 mins read
US Economics Update GM strike will deepen the manufacturing downturn The strike at General Motors, together with continued problems at Boeing, means that the incoming manufacturing data over the next month or two will go from bad to terrible. That is another reason to... 9th October 2019 · 3 mins read
US Economics Update What to make of the diverging manufacturing surveys Other surveys suggest that the ISM manufacturing index is over-playing the extent of the factory-sector slowdown. But the wider evidence suggests the outlook for manufacturers is still pretty poor. 7th October 2019 · 2 mins read
US Economics Update Recession Watch (Sep.) Our composite model suggests that the risk of a recession in 12-months’ time has fallen slightly to 17.9%, from above 20% a few weeks ago, as the rebound in the 10-year Treasury yield has reduced the... 23rd September 2019 · 4 mins read
US Economics Update Services exports are collateral damage in trade war With attention focused on the impact of tariffs on goods trade, the recent decline in services exports has gone largely unnoticed. But that has already knocked a few tenths off GDP growth and, with... 23rd September 2019 · 4 mins read
US Economics Update Fed split deepens The Fed voted to cut its key policy interest rate by an additional 25bp today, to between 1.75% and 2.00%, but the FOMC is more split than ever over what to do next. 18th September 2019 · 3 mins read
US Economics Update Trump may not like negative rates in practice President Donald Trump’s call for the Fed to slash interest rates to zero or “less”, so that the Treasury can lock-in low borrowing costs for the very long term, sounds appealing in a sustained low... 11th September 2019 · 4 mins read
US Economics Update NFIB survey points to worrying drop-off in investment The latest NFIB and JOLT surveys point to a drop in business equipment investment over the rest of the year and provide more evidence that labour market conditions are no longer tightening. 10th September 2019 · 2 mins read
US Economics Update Boost from lower rates starting to feed through The sharp fall in market interest rates over the past 12 months is starting to support the economy, with activity growth in rate-sensitive sectors like durables consumption and housing rebounding in... 9th September 2019 · 4 mins read
US Economics Update Record-high dollar not a threat to the economy Despite President Donald Trump’s complaints that the strong dollar is holding back the economy, the dollar’s rate of appreciation matters more than its level and it has risen by only 3% in trade... 22nd August 2019 · 3 mins read
US Economics Update Slowdown still more likely outcome than recession We still anticipate a modest economic downturn rather than a recession, but the spreading weakness in other parts of the global economy has increased the danger of an outright economic contraction in... 14th August 2019 · 6 mins read
US Economics Update Tariff delay not an olive branch to China The three-month delay to the imposition of tariffs on more than half of the $300bn of Chinese imports, originally scheduled to take effect next month, is obviously designed to avoid a politically... 13th August 2019 · 3 mins read
US Economics Update Currency manipulator label points to further escalation The Trump administration’s move to label China a currency manipulator may have few practical implications, but it underscores the speed at which tensions are now escalating. The key risk is that the... 6th August 2019 · 3 mins read
US Economics Update Lower rates fuelling a recovery in loan demand The Fed’s Senior Loan Officer Survey suggests that the sharp fall in market interest rates over the past year is feeding through to a turnaround in loan demand. With global growth still slowing and... 5th August 2019 · 2 mins read
US Economics Update Trump brings trade tensions back to boiling point The announcement by President Donald Trump of further tariffs on Chinese imports has rattled the markets, but we have long suspected that it was only a matter of time before the trade dispute... 2nd August 2019 · 4 mins read
US Economics Update Fed lowers rates by 25bp, but in no rush to cut again The Fed reduced the fed funds rate by 25bp — to between 2.00% and 2.25% — at today’s FOMC meeting, but it was arguably a “hawkish” rather than “dovish” cut, which supports our view that the next... 31st July 2019 · 3 mins read
