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
US Economics Update Rising borrowing costs will cause growth to slow Although the Fed’s rate hikes have so far been modest compared to previous tightening cycles, actual borrowing costs faced by households and firms have risen more markedly. That is a key reason why we... 11th October 2018 · 1 min read
US Economics Update USMCA trade deal shows Trump can be tamed The new trade deal agreed with Canada and Mexico won’t in itself have much impact on the US economy. Along with the deal recently agreed with South Korea, however, it provides another example of... 1st October 2018 · 4 mins read
US Economics Update Fed pressing ahead with rate hikes The Fed stuck to the script today, pushing ahead with another rate hike and signalling through the accompanying statement and economic projections that it will raise interest rates four times between... 26th September 2018 · 1 min read
US Economics Update Monetary Indicators Monitor (Aug.) A combination of the Fed’s balance sheet rundown and rising interest rates have pushed narrow money growth down to an eight-year low, but growth in the broader money and credit aggregates have held up... 26th September 2018 · 1 min read
US Economics Update Trade war with China not a big risk to the outlook Recent developments suggest that the trade dispute with China will continue to escalate over the coming months, with a rising possibility that by early next year all bilateral trade could be subject... 13th September 2018 · 1 min read
US Economics Update Surveys suggest wage growth has further to rise The latest NFIB and JOLT surveys suggest that the recent acceleration in wage growth has further to run. 11th September 2018 · 1 min read
US Economics Update Are rising rates already weighing on the economy? With the fiscal stimulus acting as a strong tailwind, economic growth has been unusually strong over the past few months but, below the surface, signs are emerging that rising interest rates have... 29th August 2018 · 1 min read
US Economics Update How flexible is the Fed really? In his Jackson Hole speech, Fed Chair Jerome Powell revived Greenspan-era arguments that policy should be flexible and follow a “risk management” approach, but we doubt this amounts to much in... 29th August 2018 · 1 min read
Canada Economics Update US-Mexico trade deals shows compromise is possible Today’s announcement of a bilateral trade agreement is definitely good news for Mexico and the US, but could be good or very bad for Canada. More generally, it illustrates that, despite the Trump... 27th August 2018 · 1 min read
US Economics Update Markets underestimating scope for rate cuts in 2020 Both the consensus and financial markets are coming around to our view that the Fed will cut interest rates in 2020, but we still think they are underestimating how soon and how fast the Fed’s policy... 22nd August 2018 · 1 min read
US Economics Update Trump knows he can’t really influence Fed policy President Donald Trump’s recent public criticism of Fed Chair Jerome Powell is a clever attempt to pre-emptively blame the Fed and its interest rate hikes for any future downturn in the US economy... 22nd August 2018 · 1 min read
US Economics Update Monetary Indicators Monitor (Jul.) The slowdown in narrow money growth reflects the Fed’s efforts to shrink its balance sheet and the rise in interest rates, with the latter increasing the opportunity cost of holding funds in non... 21st August 2018 · 1 min read
US Economics Update EM turmoil won’t derail the Fed’s plans There is no reason to believe that the latest bout of turbulence in emerging markets will prompt the Fed to reconsider future interest rate hikes, since the economic and financial market spillovers... 21st August 2018 · 1 min read
