US Economics Update Domestic debt deleveraging continues The Fed’s latest Financial Accounts release shows that total domestic credit market debt fell back to a 12-year low of 326% of GDP in the third quarter, from a peak of 370% in early 2009. Admittedly... 7th December 2018 · 1 min read
US Economics Update What to make of the inverted yield curve The sharp flattening of the yield curve, which has now inverted between two and five years out, is consistent with our view that economic growth is set to slow significantly next year. We currently... 6th December 2018 · 1 min read
US Economics Update What would it take to convince the Fed to pause early? On balance, we still think that the Fed will raise rates twice in the opening six months of 2019, taking the fed funds target range to between 2.75% and 3.00%. The renewed weakness of core inflation... 3rd December 2018 · 1 min read
US Economics Update Trump less likely to back out of his own trade deal The trade ceasefire agreed by Presidents Donald Trump and Xi Jinping bears a striking resemblance to the ill-fated deal reached back in May but, with Trump himself having personally negotiated the... 3rd December 2018 · 1 min read
US Economics Update Monetary Indicators Monitor (Oct.) Narrow money growth continues to slow, but that is mainly due to rising interest rates, which have reduced the portfolio demand for money. The stronger pace of growth in both broad money and bank... 27th November 2018 · 1 min read
US Economics Update Durables consumption is the other shoe to drop In contrast to other rate-sensitive areas of spending, durable goods consumption has held up well in recent months, boosted by the tax cuts. Nevertheless, as the fiscal stimulus fades and interest... 20th November 2018 · 1 min read
US Economics Update Households well placed to withstand higher rates With debt servicing costs still low and delinquency rates stable, households’ debt burdens are unlikely to emerge as a source of trouble, even as rising interest rates cause economic growth to slow... 19th November 2018 · 1 min read
US Economics Update Weak loan demand points to slower GDP growth The Fed’s latest Senior Loan Officer Survey suggests that the stagnation in third-quarter business equipment investment was no one-off and that there are few signs of a turnaround in the slumping... 13th November 2018 · 1 min read
US Economics Update Slumping gasoline prices will drag on inflation The recent slump in crude oil and gasoline prices means that headline CPI inflation could fall well below 2% for most of next year. But, given that lower prices would also provide a small boost to... 12th November 2018 · 1 min read
US Economics Update Will housing drag the economy under again? The housing market is unlikely to cause another crisis as it did in 2007. But the slowdown in housing activity is a clear sign that the Fed’s interest rate hikes are starting to take their toll on the... 12th November 2018 · 1 min read
US Economics Update December rate hike coming As universally anticipated, the Fed left rates on hold today and there was nothing in the policy statement to suggest that officials are wavering from their plans to hike interest rates again in... 8th November 2018 · 1 min read
US Economics Update Midterms don’t change the economic outlook The Democrats were widely expected to win control of the House in yesterday’s midterm elections and the results set the stage for two years of legislative gridlock. President Donald Trump and the... 7th November 2018 · 1 min read
US Economics Update Still few signs of pick-up in productivity growth There are few signs that the recent tax cuts have boosted the economy’s supply side and, with business investment growth moderating, the prospect of a marked pick-up in productivity growth is fading... 6th November 2018 · 1 min read
US Economics Update Midterms unlikely to lead to another fiscal stimulus With the Democrats likely to win control of the House, while the Republicans maintain a slim majority in the Senate, the chances of another fiscal stimulus being agreed after the midterm elections... 29th October 2018 · 1 min read
US Economics Update Fed’s monetary framework requires more tweaks With the effective fed funds rate getting close to the top of its target range again, there’s a good chance that the Fed will combine a 25bp hike in the fed funds target range in December with another... 29th October 2018 · 1 min read
US Economics Update Monetary Indicators Monitor (Sep.) Although narrow money growth rebounded in September, the Fed’s quantitative tightening will continue to exert downward pressure over the months ahead. Furthermore, signs are emerging that the Fed’s... 24th October 2018 · 1 min read
