US Economics Weekly Fed & markets catching up with inflation reality The Fed’s embrace of interest rate cuts next year is understandable when the latest data suggest that core PCE inflation is rapidly closing in on the 2% target. 15th December 2023 · 6 mins read
US Economics Weekly Markets call the Fed's bluff on higher for longer The Fed may not be quite ready to abandon its tightening bias at this week’s FOMC meeting, but the markets are no longer buying its “higher for longer” mantra. The main factor behind the shift in... 8th December 2023 · 7 mins read
US Economics Weekly Despite strong growth, core inflation normalising This week’s modest upward revision to third-quarter GDP growth was certainly eye-catching. It suggests that the US economy is not just surviving the surge in interest rates over the last couple of... 1st December 2023 · 7 mins read
US Economics Weekly Post SVB bank lending holding up well The SVB crisis back in mid-March sparked fears of a credit crunch, particularly among regional banks who are the principal source of funding for commercial real estate. Post-SVB, while the Fed’s... 22nd November 2023 · 6 mins read
US Economics Weekly Falling inflation prompts rate cut speculation The release of the slightly-better-than-expected October CPI data earlier this week triggered a massive reaction in markets. 17th November 2023 · 6 mins read
US Economics Weekly Energy disinflation; credit conditions still tight Despite the ongoing war in the Middle East, crude oil prices have slumped. The upshot is that headline CPI inflation, which rebounded from a low of 3.1% in June to 3.7% in September, should be back... 10th November 2023 · 8 mins read
US Economics Weekly Fourth quarter bringing renewed slowdown There is now mounting evidence that the economy is set for a renewed slowdown in the fourth quarter and that inflationary pressures from the labour market continue to ease. Although markets have... 3rd November 2023 · 6 mins read
US Economics Weekly Has the AI productivity boom already begun? While we are optimistic about the prospects for an AI-related boom in productivity over the next decade, it’s hard to tell whether the current pick-up in growth is a genuine structural acceleration or... 27th October 2023 · 7 mins read
US Economics Weekly Third-quarter strength unlikely to last The apparent strength of third-quarter GDP growth won’t convince the Fed to resume hiking its policy rate, particularly with the ongoing surge in long-term bond yields presenting a growing threat to... 20th October 2023 · 8 mins read
US Economics Weekly Case for final Fed hike continues to weaken There appears to be growing support at the Fed for the idea that the recent sell-off in long-term Treasuries reduces the need for further policy rate hikes, but the more persuasive reason for the Fed... 13th October 2023 · 8 mins read
US Economics Weekly Rising long rates a fiscal rather than monetary problem The conventional wisdom is that the recent surge in Treasury yields is a reaction to the Fed’s “higher for longer” message. But that surge has been focused solely on the long end of the curve... 6th October 2023 · 7 mins read
US Economics Weekly Revisions leave economic landscape unchanged The comprehensive revisions to the GDP data did not make a significant change to the macroeconomic story, with the real economy still 6.1% larger than in the fourth quarter of 2019 and the discrepancy... 29th September 2023 · 8 mins read
US Economics Weekly Hawkish Fed at odds with the data The new projections published by the Fed this week signalled that officials are fully onboard with the idea of interest rates staying ‘higher for longer’, but that is based on forecasts for real... 22nd September 2023 · 6 mins read
US Economics Weekly Shutdowns and strikes could disrupt economy With no agreement on a new contract with the big three automakers, the United Auto Workers union has started limited strike action. The impact on overall GDP should be limited but, if production... 15th September 2023 · 5 mins read
US Economics Weekly Higher energy prices not a game changer for the Fed The further rise this week in the WTI crude oil price to a 10-month high of $87 a barrel, from a recent low of less than $70 in late June, has raised fears that the resulting rebound in consumer price... 8th September 2023 · 8 mins read
US Economics Weekly Price pressures easing even as consumers go crazy This week brought more data showing that real economic activity is holding up surprisingly well given surging interest rates but, in part due to the easing in labour market conditions, price pressures... 1st September 2023 · 5 mins read
