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
US Economics Update Fed signals a step-up in the pace of tightening The Fed delivered another 25bp hike in its fed funds target range to between 1.75% and 2.00% today and the updated interest rate projections show that officials now anticipate an additional two 25bp... 13th June 2018 · 1 min read
US Economics Update Monetary Indicators Monitor (Apr.) Growth in the narrow monetary aggregates slowed further in April, but there is still little to suggest that this is having much of an impact on the wider economy. Our measure of M3 growth has held up... 11th June 2018 · 1 min read
US Economics Update Are markets right to reassess the Fed rate outlook? We still expect that domestic economic conditions will prompt the Fed to hike its policy rate a further three times this year and twice in the first half of next year. But that view is based on the... 30th May 2018 · 1 min read
US Economics Update Deal with China doesn’t address underlying tensions The deal the US has apparently reached with China averts a full-blown trade war and provides another example of the administration backing down from tough rhetoric on trade in return for relatively... 23rd May 2018 · 1 min read
US Economics Update Rising inflation expectations weaken the doves' case The recent rebound in inflation expectations is significant not only because it provides another reason to expect core inflation to trend higher this year, but also because it further weakens the case... 22nd May 2018 · 1 min read
US Economics Update Rising rates beginning to squeeze household finances Households’ balance sheets are still in good shape, with debt burdens stabilising well below their pre-crisis levels and delinquencies low. However, the further rise in newly delinquent credit card... 21st May 2018 · 1 min read
US Economics Update Fed on course for next rate hike in June The Fed was never likely to signal a major shift in policy at the conclusion of the FOMC meeting today, with the fed funds target range left unchanged at 1.5% to 1.75% and the accompanying statement... 2nd May 2018 · 1 min read
US Economics Update Monetary Indicators Monitor (Mar.) The reduction of the Fed’s balance sheet continued to weigh on the narrow monetary aggregates in March, but this is unlikely to prove a major drag on the economy. Our measure of M3 shows that broad... 1st May 2018 · 1 min read
US Economics Update Rebound in healthcare inflation a headache for the Fed The rebound in core PCE inflation over recent months in part reflects sharp increases in administered payments for hospital services that will be repeated later this year. A revival in healthcare... 30th April 2018 · 1 min read
US Economics Update The fading impact of the opioid crisis The opioid crisis is still costing lives and devastating communities, but its impact on the labour market is at least beginning to fade. The sharp fall in prescription rates last year suggests that... 25th April 2018 · 1 min read
US Economics Update China Treasury holdings offer little leverage in trade spat China’s holdings of Treasury securities, which currently stand at almost $1.2trn equivalent to 8.2% of the total outstanding, offer it little leverage in the current trade spat with the US. Dumping... 12th April 2018 · 1 min read
US Economics Update NFIB survey reveals rising cost pressures The latest NFIB survey suggests the recent tax cuts aren’t providing much support to investment. But along with the March PPI data, it also provides further evidence that inflationary pressures are... 10th April 2018 · 1 min read
US Economics Update Recent stimulus worsens fiscal woes The latest CBO projections suggest that the recent fiscal stimulus will push the Federal budget deficit up to 5% of GDP soon. Moreover, there are reasons to expect the actual outcome could be even... 9th April 2018 · 1 min read
