US Economics Update Monetary Indicators Monitor (Sep.) The rapid pace of money growth continued in September. To some extent the recent pick up reflects a jump in the precautionary demand for money, however, so it is not necessarily inflationary. 19th October 2011 · 1 min read
US Economics Update Fed action will do little to boost economy Operation Twist is a go, albeit with a small twist on the twist. The Fed's announcement today that it will act to extend the average maturity of its Treasury holdings, by buying $400bn of securities... 22nd September 2011 · 1 min read
US Economics Update Monetary Indicators Monitor (Aug.) The most recent acceleration in the annual growth rates of M1 and M2 has been dramatic, but the latest moves largely reflect a rise in the precautionary demand for money. The pick-up in the growth... 21st September 2011 · 1 min read
US Economics Update American Jobs Act is big but politically polarising President Obama's newly proposed $450bn job creation bill is equivalent to nearly 3% of GDP, so if it was passed by Congress as it stands it would certainly have a significant impact on GDP growth in... 10th September 2011 · 1 min read
US Economics Update Bernanke provides no clues on chances of QE3 In his speech at Jackson Hole, Chairman Ben Bernanke provided no real clues that the Fed is building up to more policy stimulus, such as QE3. In fact, he placed more onus on the politicians to help... 27th August 2011 · 1 min read
US Economics Update Expectations of QE3 appear premature In his speech at Jackson Hole on Friday, Fed Chairman Ben Bernanke is unlikely to fulfil the markets’ hopes that he will pave the way for a third round of asset purchases (QE3). And even if he did... 25th August 2011 · 1 min read
US Economics Update How reliable is the Philly Fed index? The plunge in the Philly Fed manufacturing index in August is not a sure-fire sign that a recession is imminent. The ISM index is more reliable. And even if the ISM index were to fall in line with the... 20th August 2011 · 1 min read
US Economics Update Monetary Indicators Monitor (Jul.) The sharp acceleration in money growth in July is not a result of the Fed's loose monetary policies but instead has been driven by investors moving out of equities and/or Treasuries and into cash... 18th August 2011 · 1 min read
US Economics Update Fed's longer low rate pledge won't change much The Fed's pledge to keep interest rates exceptionally low for much longer than previously won't significantly boost the real economy. Admittedly, the chances of QE3 have risen. But the rebound in core... 10th August 2011 · 1 min read
US Economics Update Loss of US AAA rating shouldn't be a complete disaster The news that S&P finally pulled the trigger by cutting America's long-term credit rating from AAA to AA+ will surely rock the financial markets when they open on Monday. But any spike in Treasury... 6th August 2011 · 1 min read
US Economics Update Financial market moves could take 0.5% off GDP growth If the recent financial market moves are sustained, the net effect could be to reduce annualised GDP growth by around 0.5%. That would not tip the US into recession. But it supports our long-held view... 6th August 2011 · 1 min read
US Economics Update Revision to 2011 GDP forecast not due to debt ceiling deal We now expect the US economy to grow by just 2% this year, down from our previous forecast of 2.5%. Growth in 2012 is unlikely to be any better. This downward revision has nothing to do with the... 3rd August 2011 · 1 min read
US Economics Update Default seemingly averted, but downgrade almost certain The latest noises from Washington suggest that politicians are close to reaching a compromise on a deal that will raise the debt ceiling ahead of Tuesday night, thereby preventing a debt default and a... 1st August 2011 · 1 min read
US Economics Update What if the US defaults? We still think that the US government is unlikely to default on its debt. But if it did, the implications would potentially be far more serious than those that would follow a one or two notch... 26th July 2011 · 1 min read
US Economics Update What if the US loses its AAA rating? A downgrade of US government debt would not necessarily be disastrous for Treasuries or the dollar, at least once the dust settled. However, it would be the starkest warning yet that the fall-out from... 23rd July 2011 · 1 min read
US Economics Update Plenty of deficit reduction plans, but still no agreement An agreement to raise the debt ceiling still appears to be some way off, but not for lack of trying. Every day seems to bring a new deficit reduction plan. With the clock ticking, we doubt there is... 21st July 2011 · 1 min read
