US Economics Update Trump, the Fed, and the dollar Most of the major policy initiatives being suggested by Donald Trump’s campaign would be inflationary; whether it’s narrowing the trade deficit via tariffs or a dollar devaluation, curbing immigration... 29th April 2024 · 5 mins read
US Economics Update All signs still point to lower shelter inflation Although the BLS’s new tenant rent index has overstated the speed of the slowdown in shelter inflation, the leading indicators remain unanimous in their message that the slowdown is still coming. 23rd April 2024 · 4 mins read
US Economics Update Falling full-time employment not a sign of weakness The rise in part-time employment is not a sign of economic weakness, but instead reflects the large inflow of prime-age women into the labour force, who have been the big beneficiaries of the post... 8th April 2024 · 4 mins read
US Economics Update Surging stock market a tailwind for consumers The continued surge in the stock market that we forecast is likely to drive household net wealth to a record high as a share of incomes and provide a tailwind to consumption growth. But that shouldn’t... 4th April 2024 · 3 mins read
US Economics Update Inflation pressure from labour market continues to fade The February JOLTS data suggest that labour market conditions are now easing at a more gradual pace, but that isn’t a surprise when most indicators of slack have already returned to pre-pandemic norms... 2nd April 2024 · 2 mins read
US Economics Update Software increasingly driving productivity gains We still believe that the current productivity boom is mainly a cyclical phenomenon, as tight labour market conditions have forced firms to expand output by boosting the efficiency of their existing... 26th March 2024 · 3 mins read
US Economics Update Fed still on track for a June rate cut Despite upward revisions to the median projections for both GDP growth and core PCE inflation, the Fed’s median forecast for interest rates still shows a cumulative 75bp of policy loosening this year... 20th March 2024 · 3 mins read
US Economics Update JOLTS data point to continued easing in wage growth The January JOLTS release showed no evidence of a resurgence in labour demand. With forward looking indicators still pointing to a sharp easing in wage growth, there is little to suggest that the... 6th March 2024 · 2 mins read
US Economics Update Rebound in money supply not an inflation threat Money growth remains weak but is rebounding steadily, with our broader M3 measure recovering to its strongest since mid-2022. But there is no reason to expect this to drive a rebound in inflation. 4th March 2024 · 3 mins read
US Economics Update Mind the Gap: Markets should focus on PCE not CPI The strong reaction to the January CPI data demonstrates that markets still don’t fully comprehend that the Fed is focused on the alternative PCE measure of inflation. While core CPI inflation was... 14th February 2024 · 4 mins read
US Economics Update Read my lips: No new tax cuts Speculation will inevitably build that a Donald Trump victory in this year’s presidential election would be followed, once again, by large-scale tax cuts. With the Federal budget outlook in a far... 12th February 2024 · 5 mins read
US Economics Update Strong payrolls unlikely to reignite wage growth The strength of payroll employment growth over the past two months is likely to be a blip rather than the start of a renewed acceleration and the wider evidence still points to a further slowdown in... 8th February 2024 · 5 mins read
US Economics Update Credit conditions normalising The Fed’s latest Senior Loan Officer Opinion Survey suggests that banks have put last year’s SVB regional bank crisis firmly behind them and, with long-term interest rates markedly lower than the... 5th February 2024 · 2 mins read
US Economics Update Powell suggests first rate cut more likely to be May Based on the surprisingly explicit steer provided by Fed Chair Jerome Powell halfway through today’s press conference, we now expect the first Fed rate cut to come at the early-May FOMC meeting rather... 31st January 2024 · 3 mins read
US Economics Update JOLTS data suggest disinflation will continue The December JOLTS data show a continued painless normalisation in the labour market – with job openings on a downward trend, layoffs unusually low and wage growth set for a sharp slowdown. 30th January 2024 · 2 mins read
US Economics Update Is the worst behind us for business bankruptcies? The surge in Chapter 11 business bankruptcy filings last quarter is not as bad as it looks, as many of them related to the WeWork failure. Excluding those, bankruptcies trended lower at the end of... 10th January 2024 · 2 mins read
