US Economics Update State & local cash crunch could worsen recession The coronavirus-induced collapse in economic activity means that state & local government tax revenues will plunge over the coming months. With balanced budget rules in most states meaning that lower... 6th May 2020 · 4 mins read
US Economics Update US-China tensions unlikely to subside before election There is a good chance that the renewal of antagonism between the US and China, this time over the origin of the coronavirus rather than trade, will persist – and might even escalate – in the run up... 6th May 2020 · 4 mins read
US Economics Update Fed keeping all options on the table Since the Fed had already gone all-in on its monetary policy stimulus, it was little surprise that there no major policy announcements in today’s statement. Over the next few months the Fed will... 29th April 2020 · 3 mins read
US Economics Update Fiscal rescue to push debt burden close to WWII levels With Congress ramping up its fiscal stimulus rescue package, federal debt will rise above 100% of GDP this year, not far off the record high of 108% of GDP in the aftermath of WWII. That is not a... 28th April 2020 · 6 mins read
US Economics Update How bad is the fallout in the labour market? The unemployment rate will surge to more than 15% in April but, unlike in a normal economic cycle, the high proportion of people on a temporary layoff leaves us hopeful that rate will come down... 23rd April 2020 · 2 mins read
US Economics Update Temporary immigration ban highlights longer-term risk President Trump’s tweet announcing a temporary ban on immigration is most likely just a short-term tactic to fire up his base. But it is hard not to see this as the beginning of an even more nativist... 21st April 2020 · 3 mins read
US Economics Update Is the Fed monetising the deficit? The scale of the Fed’s purchases of Treasury securities in the first few weeks of the pandemic, in addition to the sheer size of the broader expansion in its balance sheet, arguably suggests that the... 20th April 2020 · 7 mins read
US Economics Update Paycheck protection program will reduce scarring The Paycheck Protection Program (PPP) of forgivable small business loans has come too late to prevent the huge initial wave of layoffs, but will be more useful in helping less directly affected firms... 14th April 2020 · 4 mins read
US Economics Update UI expansion to cushion blow from layoffs The significant increase in unemployment insurance payments included in the recent fiscal package means that many claimants could end up being paid close to what they previously earned. This suggests... 8th April 2020 · 3 mins read
US Economics Update Could the pandemic trigger another banking crisis? The coronavirus-related recession will lead to a marked increase in defaults on bank loans but, while that will hit earnings and justifies the sharp sell-off in banking stocks, the greatly improved... 7th April 2020 · 5 mins read
US Economics Update Fed super-sizing its balance sheet The Fed’s balance sheet has already ballooned in size to $5.7trn, from just less than $4trn before the coronavirus pandemic struck, and that’s before the introduction of its new lending facilities and... 2nd April 2020 · 2 mins read
US Economics Update Initial Jobless Claims (w/e March 28th) This Update was originally sent to clients as a Rapid Response immediately after the data was released on 2nd April. The surge in initial jobless claims to a record high of 6,648,000 last week, from 3... 2nd April 2020 · 2 mins read
US Economics Update New macro forecasts – Q2 GDP to fall at 40% pace With the number of COVID-19 cases in the US skyrocketing and a rising share of the population under lockdown, we need to revise our macro forecasts quite significantly: We now expect second-quarter... 25th March 2020 · 4 mins read
US Economics Update Congress steps up to the plate The $2trn stimulus package agreed by Congress will include a permanent fiscal expansion worth up to 5% of GDP and, in conjunction with the new lending facilities announced by the Fed, could channel up... 25th March 2020 · 4 mins read
US Economics Update Fed turns the easing up to 11 This Update was originally sent to clients as a Rapid Response immediately after the Fed’s policy statement on 23rd March. The Fed’s expansion of its open-ended QE, together with new measures to lend... 24th March 2020 · 2 mins read
US Economics Update Republican stimulus bill only a first step The Republican senators’ fiscal proposals would provide an immediate stimulus worth more than 2% of GDP and help to offset some of the damage to the economy from the coronavirus outbreak. That said... 20th March 2020 · 4 mins read
