US Economics Update Labour market conditions remain tight While the job openings and quits rates both edged up again in March, the bigger picture remains that labour market conditions have been stable over the past nine months or so, with few signs that... 3rd May 2022 · 3 mins read
US Economics Update Fed kicks off tightening cycle in hawkish mood The Fed began its tightening cycle with a 25bp hike today and, despite the uncertainty caused by the war in Ukraine and China's efforts to contain the spread of the Omicron variant, officials look set... 16th March 2022 · 3 mins read
US Economics Update Recession risks still contained The earlier spike in crude oil prices, slump in stock markets and the flattening of the Treasury yield curve have prompted fears that US economy is headed for a 1970s-style stagflation, but our... 16th March 2022 · 2 mins read
US Economics Update Tentative easing in labour shortages Both job openings and quits have fallen back slightly over the past several months, which suggests that wage growth and underlying inflationary pressures should soon stabilise. 9th March 2022 · 3 mins read
US Economics Update Higher oil prices not a huge risk to consumers The surge in gasoline prices in recent days will only add to the drag on households purchasing power from fading stimulus and higher inflation over recent months. But with consumers able to cushion... 8th March 2022 · 4 mins read
US Economics Update Powell keeps the Fed’s options open Chair (pro tempore) Jerome Powell indicated in his congressional testimony today that, with Russia's attacks on Ukraine roiling markets and creating additional uncertainty, he was inclined to support... 2nd March 2022 · 3 mins read
US Economics Update US economy insulated from Ukraine war The war in Ukraine will prevent US inflation from falling as much as it otherwise would have in the coming months, but it will have little impact on the real economy, so we doubt it will stop the Fed. 1st March 2022 · 3 mins read
US Economics Update Worst may be over for goods shortages Goods supply shortages are now easing. Like the recent stabilisation in labour market slack, that improvement has, at least partly, been driven by a slowdown in demand, so it isn’t a sign that... 1st March 2022 · 4 mins read
US Economics Update State & local spending won’t replace federal stimulus The strong finances of state & local governments suggest that they will continue to increase spending at a rapid pace this year. But that won’t come close to matching the huge economic boost from the... 23rd February 2022 · 4 mins read
US Economics Update Labour market shortages stabilising The upward revision to household employment and the labour force imply that the labour market recovery has been a little stronger than we previously believed, but measures of slack suggest that labour... 10th February 2022 · 4 mins read
US Economics Update What explains the ongoing weakness of labour supply? Retirements still explain around half of the shortfall in labour force participation since the pandemic. While the rest of the decline reflects a broad mix of factors, the longer those workers remain... 2nd February 2022 · 4 mins read
US Economics Update Fed has better tools than a 50bp rate hike The markets are right to be sceptical of claims that the Fed could begin its tightening cycle with a “shock-and-awe” 50bp interest rate hike next month. At a time when the yield curve is already... 2nd February 2022 · 5 mins read
US Economics Update Fed lines up March rate hike The Fed’s announcement that it will “soon be appropriate” to raise interest rates and the numerous hints dropped by Chair Jerome Powell in the post-meeting press conference all but guarantee that a... 26th January 2022 · 3 mins read
US Economics Update What explains the surge in household employment? The incredibly strong gains in the household survey measure of employment over the final two months of last year, which have come at the same time as the more closely-watched payroll measure showed... 12th January 2022 · 2 mins read
US Economics Update Hawkish Powell consistent with March rate hike In his Senate re-nomination hearing today, Fed Chair Jerome Powell echoed the increasingly hawkish rhetoric coming from other officials. We expect the fed funds policy range to reach 1.00% to 1.25% by... 11th January 2022 · 3 mins read
US Economics Update Fed “QT” could include outright asset sales this time As hinted at in the December FOMC minutes, we expect the Fed will begin shrinking its balance sheet later in 2022. They would start by allowing maturing assets to run off, but if longer-term bond... 6th January 2022 · 5 mins read
