US Economics Focus Labour shortages will last well into 2022 The widespread labour shortages evident in the survey data and job opening & quit rates are only partly due to transitory factors, including enhanced unemployment benefits, childcare constraints, and... 29th June 2021 · 17 mins read
US Economics Focus Coming surge in core inflation to be sustained Fed Chair Jerome Powell is resolute in his belief that the burst of stronger inflation we are about to see will prove temporary, with underlying inflation dropping back to the 2% target next year. We... 6th May 2021 · 25 mins read
US Economics Focus Introducing our common inflation expectations index In a world where the Phillips curve is flat, inflation expectations become the key driver of actual inflation over the medium term. But getting a true handle on inflation expectations is difficult... 31st March 2021 · 14 mins read
US Economics Focus How much stimulus is too much? Much of the recent discussion on whether the proposed $1.9trn fiscal stimulus, equivalent to nearly 9% of GDP, could be too big when the output gap is closer to 3%, has glossed over the fact that the... 23rd February 2021 · 15 mins read
US Economics Focus $15 minimum wage would add to inflation pressures We suspect that President Joe Biden’s plan to more than double the minimum wage within four years would have only a minimal impact on GDP. While there would almost certainly be some job losses as a... 10th February 2021 · 14 mins read
US Economics Focus What steps will Biden take to tackle climate change? President-elect Joe Biden stood for election on a far-reaching environmental plan which, although it will be harder to implement with the Republicans likely to control the Senate, still represents a... 9th December 2020 · 21 mins read
US Economics Focus Pandemic increases risk of high inflation The pandemic has increased the odds that the US will eventually experience a period of high inflation, principally because we expect the Fed to be less committed to ensuring price stability in the... 16th November 2020 · 32 mins read
US Economics Focus How will the election shape the economic outlook? A Joe Biden victory in November together with Democrats winning back control of the Senate could see a big increase in taxation and federal spending, together with a shakeup of healthcare, regulatory... 13th August 2020 · 27 mins read
Global Economics Focus Lasting blow to supply capacity is not inevitable It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government... 29th June 2020 · 28 mins read
US Economics Focus The impact of a second Trump term on the economy If President Donald Trump were to win a second term, we’d expect both fiscal and monetary policy to remain loose, amid a push to install a more dovish Fed Chair in 2022. There would also be an upside... 23rd January 2020 · 21 mins read
US Economics Focus Deregulation doing little to boost economy There is little to suggest that President Donald Trump’s deregulatory agenda has provided a significant boost to economic growth. While it may still be too soon to fully judge the impact, the... 9th January 2020 · 15 mins read
US Economics Focus Recession trackers: A guide to our new models The inversion of the yield curve and the deterioration in survey-based indicators have raised fears that the US is headed for a recession, but the hard economic data and other financial indicators... 5th September 2019 · 21 mins read
US Economics Focus Democratic primary hints at break from past policies It is still too early to tell who will end up securing the Democratic nomination for the presidential election in 2020, but there is a good chance that the successful candidate will come from the... 23rd April 2019 · 1 min read
US Economics Focus What would convince the Fed to cut rates? The economy is still in stronger shape than it usually was when the Fed started cutting interest rates in the past. Based on the Fed’s previous behaviour, however, the economic slowdown that we expect... 16th April 2019 · 1 min read
US Economics Focus Does the Fed have the tools to fight the next recession? There are good reasons to believe the next recession will be modest, which means that, even though the nominal interest rate would probably hit the near-zero lower bound again, the Fed should have the... 22nd January 2019 · 1 min read
US Economics Focus Core inflation has already peaked The modest growth of unit labour costs and appreciation of the dollar this year suggest that core inflation is unlikely to rise much further. With inflation quiescent, we expect the Fed to continue... 13th November 2018 · 1 min read