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
US Economics Focus Debt: Is there another crisis looming? A widespread US debt crisis is unlikely but, over the next few years, over-leverage in the non-financial corporate sector, particularly the oil & gas, utilities and telecoms industries, could trigger... 11th October 2018 · 1 min read
US Economics Focus Will surging interest rates sink the economy? We expect rising interest rates to cause economic growth to slow sharply next year, especially as the boost from fiscal stimulus fades. Our best judgement is that there’s a 30% chance of a mild... 12th June 2018 · 1 min read
US Economics Focus Renewed boom in productivity remains elusive Following a decade when productivity growth averaged barely 1% per year, we anticipate a modest acceleration to 1.5% over the next few years, principally because the low unemployment rate, rising... 5th March 2018 · 1 min read
US Economics Focus Will the Fed abandon inflation targeting? In the long run we suspect the Fed will move away from rules-based inflation targeting and shift to a more discretionary regime that focuses on financial stability as well as price stability and full... 18th January 2018 · 1 min read
US Economics Focus Inflation: The next 20 years Inflation has been unusually stable over the past decade at a relatively low level, but there is no guarantee that the status quo will be maintained in the long term. A slide into deflation or a... 11th December 2017 · 1 min read
US Economics Focus Prime-age participation has further to rise The share of people aged 25 to 54 who are in the labour force is likely to rise further over the coming years, as labour market conditions continue to tighten and disability rates drop back... 4th October 2017 · 1 min read
US Economics Focus Is it Amazon’s fault that the Fed can’t hit its inflation target? The shift to online sales is having a transformative effect on the retail industry, but does not explain the weakness in core inflation, either this year specifically or the Fed’s more general failure... 21st August 2017 · 1 min read
US Economics Focus Next recession only a few years away We expect the current economic expansion to continue for the next year or two, by which time it will be the longest on record. But all expansions come to an end, and the rise in interest rates we... 16th August 2017 · 1 min read
US Economics Focus Is the Fed nearly done raising interest rates? The markets remain sceptical that the Fed will continue to normalise interest rates over the next couple of years. But even with inflation still below target, the simple policy rules that the Fed... 20th July 2017 · 1 min read
US Economics Focus Has the natural unemployment rate fallen? A decline in frictional unemployment and shifts in the composition of the labour force, which is now on average older and better educated, mean that the so-called natural unemployment rate has fallen... 13th June 2017 · 1 min read
US Economics Focus What explains the recent drop back in core inflation? The recent weakness in core CPI inflation in March and April has forced us to revise down our inflation forecasts for the next couple of years. Even if the recent drop in the price of cell phone plans... 16th May 2017 · 1 min read
US Economics Focus Will tax cuts boost sustainable GDP growth to 3 percent? There is little evidence to support the claim by Treasury Secretary Steven Mnuchin that tax cuts would pay for themselves by boosting economic growth to 3% or even higher, particularly not when the... 11th May 2017 · 1 min read