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The past couple of weeks have been dominated by the financial market impact of the coronavirus pandemic, with equity markets continuing to plummet, the dollar surging and signs of strain persisting in money markets, despite the Fed’s interventions. The …
19th March 2020
Although the Boeing shutdown and the coronavirus outbreak pose downside risks to the economy in the first quarter, there are mounting signs that underlying momentum in the economy is strengthening. We estimate the halt in 737 Max production could reduce …
19th February 2020
The Fed’s interest rate cuts, a truce in the trade war, and a more positive global backdrop have all set the stage for an acceleration in economic growth this year. We calculate that GDP growth was a modest 2.0% annualised in the fourth quarter, as a …
21st January 2020
GDP growth appears to have slowed slightly, to between 1.5% and 2.0% annualised in the fourth quarter, but the more stable global backdrop and the lagged impact of this year’s loosening in financial conditions should drive a gradual recovery from mid-2020 …
19th December 2019
The latest activity data suggest that economic growth will slow to just 1.0% annualised in the fourth quarter, from 1.9% in the third, but there are growing hopes that may prove to be the nadir. Much of that slowdown is being driven by firms running down …
20th November 2019
The news of an apparent trade “deal” between the US and China has pushed back the threat of further tariffs and helped to un-invert the yield curve, but economic growth still appears to be slowing. Our tracking estimate suggests that growth slowed to 1.5% …
21st October 2019
The Fed will look through any rise in headline inflation resulting from the recent jump in crude oil prices, but the acceleration in core CPI inflation, to an 11-year high in August, is harder to ignore. (See Chart 1.) Tariffs on Chinese imports explain …
18th September 2019
The further inversion of the yield curve – with the 10-2 year spread briefly inverting last week – has heightened fears that a recession is coming soon, but the real economy shows few signs of any imminent capitulation. Aside from industrial production, …
19th August 2019
The Fed is almost certain to cut interest rates at the FOMC meeting later this month, despite some better news on the real economy. Payroll employment growth was much stronger than expected in June, the resurgence in underlying retail sales suggests that …
17th July 2019