US Economics Weekly Energy prices keep on rising The 390,000 gain in payrolls employment last month demonstrates that the real economy is holding up well, although the further rise in energy prices will put households under even more pressure. 3rd June 2022 · 6 mins read
US Economics Weekly Strong consumer; “greedflation” not a thing The 0.7% jump in real consumption in April, together with the upward revision to March’s gain leaves consumption on track for a 5% annualised gain in the second quarter. Thanks to a rapid rebound in... 27th May 2022 · 6 mins read
US Economics Weekly Spender of last resort With China’s economy hampered by its zero-covid lockdowns, and Europe’s economy suffering because of the massive surge in imported energy prices caused by the war in Ukraine, the American consumer has... 20th May 2022 · 7 mins read
US Economics Weekly Inflation looking better under the hood Fed officials will have been eyeing the flood of red on their screens this week with a growing sense of foreboding. Admittedly, for GDP growth to slow and inflation to fall, they want financial... 13th May 2022 · 6 mins read
US Economics Weekly Fed hikes as acute shortages drive up costs The latest weakness in equities isn't going to stop the Fed from continuing to hike its policy rate by 50bp in June and July, not when labour market conditions remain unusually tight and, in an... 6th May 2022 · 6 mins read
US Economics Weekly Fed to ignore Q1 GDP and hike regardless We doubt that the unexpected 1.4% annualised decline in first-quarter GDP will stop the Fed from hiking its policy rate by a bigger 50bp next week or from launching quantitative tightening. The Fed... 29th April 2022 · 8 mins read
US Economics Weekly Fed set to push harder on the brakes With Fed officials seemingly competing to try and sound more hawkish than their peers, a 50bp rate hike next month appears nailed on – even though this week also brought further tentative signs that... 22nd April 2022 · 6 mins read
US Economics Weekly Peak inflation won’t stop the Fed hiking aggressively The news that core prices rose by a more modest 0.3% in March, even as higher energy prices drove headline inflation to a 40-year high of 8.5%, explains why investors pared bets this week on how far... 14th April 2022 · 5 mins read
US Economics Weekly Fed lurching from one extreme to the other The Fed minutes revealed that officials are in a hawkish mood and, after their brief flirtation with the flexible average inflation framework last year, they are now desperate to rapidly recalibrate... 8th April 2022 · 8 mins read
US Economics Weekly Long rates rising but still low, particularly in real terms The inversion of the 10y-2y Treasury yield spread this week led to predictable speculation that the Fed’s interest rate hikes would quickly push the US economy into recession. 1st April 2022 · 7 mins read
US Economics Weekly Inflation outlook becomes more nuanced Less than a week after the Fed raised interest rates by 25bp at its policy meeting and issued projections showing that it intended to hike rates at each of the remaining six meetings this year, Chair... 25th March 2022 · 6 mins read
US Economics Weekly Fed will deliver a further 150bp of rate hikes this year The Fed delivered on expectations of a 25bp rate hike this week but went further than we anticipated in pencilling in a further six 25bp hikes this year and four next. With their forecasts for core... 18th March 2022 · 5 mins read
US Economics Weekly Fed to kick off tightening cycle We expect the Fed to hike interest rates by 25bp at next week’s FOMC meeting and, despite the war in Ukraine, to unveil new projections showing at least five interest rate hikes this year in total. 11th March 2022 · 6 mins read
US Economics Weekly Surging energy prices will add to inflation Surging energy prices will push inflation even higher in the next month or two but, unlike in Europe, the fallout on the real economy should be relatively modest, allowing the Fed to push ahead with... 4th March 2022 · 6 mins read
US Economics Weekly Waller ramps up the hawkishness In his speech late last night, Christopher Waller became the first Fed Governor to throw his weight behind St Louis Fed President James Bullard’s call for 100bp of rate hikes by the middle of the year... 25th February 2022 · 7 mins read
US Economics Weekly Economy unscathed by Omicron In a week when we learned that producer price inflation, retail sales and industrial production all came in hotter than expected in January, interest rate expectations nevertheless declined, as... 18th February 2022 · 6 mins read