US Economics Update Fed may have to ramp up Treasury purchases again The Fed’s balance sheet has started to shrink again, as the emergency liquidity measures deployed at the height of the crisis have started to wind down, the pace of Treasury purchases has slowed... 23rd June 2020 · 4 mins read
US Economics Update Post-lockdown recovery exceeding low expectations The unexpected strength of the bounce-back in retail sales in May could mean that we are underestimating the potential for economic activity to return to pre-pandemic levels soon. Nevertheless... 18th June 2020 · 4 mins read
US Economics Update Biden edges ahead in election race A lot could still change over the next five months but, as things stand, Joe Biden appears to be the favourite to win November’s presidential election. Biden’s policies are more moderate than some of... 17th June 2020 · 4 mins read
US Economics Update Rise in infections won’t stop economy rebounding The rise in new infections in a handful of states across the South and West is nothing like the national surge we saw in late-March and early April that triggered widespread lockdowns. It does... 17th June 2020 · 3 mins read
US Economics Update Surge in corporate debt could weigh on recovery The dramatic pandemic-related rise in government debt has attracted most of the attention, but it is the surge in corporate debt that could exert a bigger drag on the economic recovery in coming years... 15th June 2020 · 4 mins read
US Economics Update Is the end of the $600 UI payments a major risk? The potential expiry of the expanded $600 weekly unemployment insurance payments at the end of July could weigh on consumption. But those payments look more likely to see at least a partial extension... 15th June 2020 · 3 mins read
US Economics Update Fed takes first steps to strengthen forward guidance The Fed left its policy stance broadly unchanged at the conclusion of today’s FOMC meeting, but it did strengthen its forward guidance a little – by publishing interest rate projections that show... 10th June 2020 · 3 mins read
US Economics Update How did we get employment so badly wrong? The unexpected 2.5 million rebound in nonfarm payroll employment in May, against a consensus expectation of a 7.5 million decline, has generated a lot of speculation that the figures were either... 9th June 2020 · 6 mins read
US Economics Update What to make of resilient consumer confidence The relative resilience of consumer confidence in spite of the huge rise in unemployment is testament to the government’s fiscal rescue efforts and suggests the recovery will accelerate as fear of the... 21st May 2020 · 3 mins read
US Economics Update Next wave of fiscal measures to be less impressive Congress will probably agree to another round of fiscal support over the coming weeks, but we doubt that will make a huge difference to the economy, given that it appears set to be an order of... 21st May 2020 · 4 mins read
US Economics Update Activity recovering only gradually as lockdowns ease The early evidence suggests that, even in states which have begun to ease lockdown measures, demand is initially recovering only gradually. It also points to the recovery completely bypassing some... 14th May 2020 · 4 mins read
US Economics Update Wage growth set for sharp slowdown Although employment should partially rebound once lockdown measures are lifted, the pandemic is still likely to result in a sustained increase in labour market slack, which will push wage growth... 13th May 2020 · 2 mins read
US Economics Update Monetary Indicators Monitor (Apr.) The usual suspects are already claiming that the surge in the growth rates of the monetary aggregates will trigger a marked rise in inflation. (See Chart 1.) But the pick-up, which is a direct result... 12th May 2020 · 3 mins read
US Economics Update Long-term debt issuance opens door to inflation The Treasury’s plan to issue more long-term debt is sensible enough when long rates are at ultra-low levels, but a more marked shift in debt issuance policy could signal that policymakers are hoping... 11th May 2020 · 3 mins read
US Economics Update Negative rates still a long shot in the US The Fed has developed a habit of caving in the face of market pressure in recent years, but we still think the chances of it pushing the fed funds rate into negative territory are low. Fed officials... 11th May 2020 · 5 mins read
US Economics Update Surveys provide a poor guide for the months ahead The surprising resilience of the Markit PMIs and ISM indices this month is more a function of the survey design than an indication that the economic hit is not as bad as the hard data suggest. The... 7th May 2020 · 3 mins read
