US Economics Update Fed’s Powell strikes dovish tone despite vaccines The Fed acknowledged in its post-FOMC meeting statement today that the economic recovery weakened in the final couple of months of last year, but balanced that near-term pessimism with greater... 27th January 2021 · 3 mins read
US Economics Update Fed will be reassured by rising inflation expectations The rebound in market-based inflation compensation measures will not alarm the Fed since expectations are still relatively muted. Instead, Fed officials are more likely to view the rise as a welcome... 26th January 2021 · 2 mins read
US Economics Update Monetary Indicators Monitor (Dec.) The surge in narrow money growth is entirely due to regulatory changes and a substitution out of savings accounts due to low interest rates. Our measure of M3 shows broad money growth has slowed... 20th January 2021 · 3 mins read
US Economics Update Surveys point to rising price pressures The plunge in small business optimism in December is mostly noise related to the election, but the clear signal from both the NFIB and JOLT surveys out today is that inflationary pressures appear to... 12th January 2021 · 2 mins read
US Economics Update Democrats’ Senate wins not a gamechanger With Democrats picking up both Georgia Senate seats in yesterday’s run-off elections, President-elect Joe Biden will have a much easier time confirming his picks for cabinet positions and the chances... 6th January 2021 · 4 mins read
US Economics Update Fiscal boost not as large as headline figures suggest The $900bn fiscal relief deal agreed by Congress won’t represent as big a fiscal expansion as the headline figures suggest as it appears to mostly involve recycling the unused funding from previous... 22nd December 2020 · 3 mins read
US Economics Update Stimulus another reason for optimism about 2021 The additional $900bn stimulus that looks likely to be passed by Congress within the next day or two means that we are raising our GDP growth forecast for 2021 to 5.5%, from 5.0%. 21st December 2020 · 3 mins read
US Economics Update Fed tweaks its forward guidance The Fed tweaked the guidance for its asset purchases in the statement issued after the conclusion of today's FOMC meeting, with the new language implying those purchases could continue for longer than... 16th December 2020 · 3 mins read
US Economics Update State & local budget hit not as bad as feared The relative resilience of state & local government tax revenues during the pandemic means that the overall budget shortfalls facing those governments are likely to be smaller than many had feared... 14th December 2020 · 4 mins read
US Economics Update New GDP forecasts: weak end to 2020, better 2021 The recent surge in coronavirus infections means that economic growth will be slower than we previously assumed in both the fourth quarter and the first quarter of next year. As the associated... 30th November 2020 · 3 mins read
US Economics Update Household saving could remain permanently elevated The huge amount of personal savings built up during the pandemic, if unleashed, represents perhaps the biggest upside risk to the economy over the coming year or two. But even once the spread of the... 24th November 2020 · 4 mins read
US Economics Update 13(3) decision could be net positive for the economy The Treasury’s decision not to extend the majority of the Fed’s emergency lending facilities beyond the end of the year is unlikely to have a major impact on the economy given that those facilities... 20th November 2020 · 3 mins read
US Economics Update Unemployment benefit expiry not a major threat The expiry of the remaining enhanced unemployment insurance programs at the end of the year would hit the incomes of the unemployed but would be unlikely to deal a major blow to the economy. With... 18th November 2020 · 3 mins read
US Economics Update Monetary Indicators Monitor (Oct.) Growth in narrow measures of the money supply has continued to edge higher as demand and saving deposits continue to accumulate but, with growth in broader measures of money and bank lending dropping... 17th November 2020 · 3 mins read
US Economics Update Effective vaccine would be a game-changer The introduction of one or more highly effective vaccines early next year would prompt us to revise up our 2021 GDP forecast, possibly quite significantly. The prospects of a vaccine might convince... 10th November 2020 · 4 mins read
US Economics Update Economic news will get worse before it gets better The high-frequency data suggest there is a growing risk that the recovery stalls over the next month or two, even as the growing potential for effective vaccines together with a bipartisan fiscal... 10th November 2020 · 2 mins read
