US Economics Update Midterms 2018: What's at stake? The most likely outcome of the midterm elections is legislative gridlock, although a second round of tax cuts would be unlikely even if the Republicans narrowly maintain control of both Houses of... 7th August 2018 · 1 min read
US Economics Update Fed sticking to its guns As was widely expected, the Fed left interest rates on hold today but, by upgrading its assessment of economic growth to “strong” in the accompanying policy statement, it hinted that it will keep... 1st August 2018 · 1 min read
US Economics Update Is the saving rate really that much higher? The upward revisions to the personal saving rate suggest that the consumption outlook could be brighter than we previously believed, but we would urge caution since those revisions are hard to square... 1st August 2018 · 1 min read
US Economics Update Monetary Indicators Monitor (Jun.) Growth in the broad monetary aggregates and bank lending has continued to accelerate in recent months even as the monetary base contracted, suggesting that the Fed’s balance sheet run-down is having... 31st July 2018 · 1 min read
US Economics Update Mining boost to economic growth no flash in the pan Unlike the pre-tariff spike in soybean exports, the near-100% annualised surge in mining structures investment in the second quarter, which accounted for 0.4% points of the 4.1% annualised gain in... 30th July 2018 · 1 min read
US Economics Update Trade war cancelled…maybe The unexpectedly successful trade meeting between President Donald Trump and EU President Jean-Claude Juncker yesterday has raised hopes that a much bigger trade war can be averted. Admittedly, the... 26th July 2018 · 1 min read
US Economics Update Flattening yield curve not the only bearish signal Recent trends in the survey evidence cast doubt on the idea that the Treasury yield curve is giving a misleading signal due to structural distortions. The curve may have steepened in recent days but... 24th July 2018 · 1 min read
US Economics Update Fed’s balance sheet plans may need to change The Fed’s preference is to stick to the balance sheet normalisation plan it drew up last year, but we think a sharp economic slowdown will prompt the Fed to halt its balance sheet run-off in 2020. In... 18th July 2018 · 1 min read
US Economics Update Is it time to worry about the flattening yield curve? The recent flattening of the Treasury yield curve appears to have been driven partly by structural forces, but this time is rarely different and when the yield curve inverts, an economic slowdown... 16th July 2018 · 1 min read
US Economics Update Another small step on the path to a big trade war Even though the tariffs actually imposed up to now are relatively small in comparison to overall trade flows and GDP, it is hard to see how a full-blown trade war can be avoided at this stage. There... 11th July 2018 · 1 min read
US Economics Update Could Trump withdraw from the WTO? President Donald Trump would probably struggle to pull the US out of the WTO on his own. But unless Congress starts taking a tougher stance against his protectionist urges, the continued use of... 11th July 2018 · 1 min read
US Economics Update NFIB & JOLT surveys point to rising cost pressures The NFIB survey and JOLTS figures released today show that labour market conditions are still tightening. 10th July 2018 · 1 min read
US Economics Update Soybean tariffs causing distortion in export growth The rush by US exporters to beat the imposition of retaliatory tariffs on soybeans by China will provide an artificial boost to second-quarter GDP growth, but will become a potentially significant... 9th July 2018 · 1 min read
US Economics Update How big of a deal would auto tariffs be? Applying tariffs on auto imports would represent the biggest escalation of protectionism so far. Even though the direct impact would be small, boosting the price level by 1% point or so and triggering... 5th July 2018 · 1 min read
US Economics Update Monetary Indicators Monitor (May) The monetary data reveal a sharp slowdown in M1 growth in May, to its weakest pace since early 2016. But this isn’t a serious concern. Our measure of M3 broad money continued to expand at a decent... 5th July 2018 · 1 min read
US Economics Update Drop in airfares inflation a measurement problem The recent drop in airfare inflation has been a small drag on core inflation and, unlike last year’s fall in wireless telephone service prices, appears to be a genuine measurement problem. Underlying... 21st June 2018 · 1 min read
