US Economics Update 737 Max woes could hit first-quarter GDP Boeing’s decision to halt production of the 737 Max aircraft could deliver a big hit to the manufacturing sector just as prospects were beginning to brighten. If it the shutdown lasts the entire... 17th December 2019 · 3 mins read
US Economics Update Phase One agreement not a big deal for the economy The “Phase One” trade deal apparently agreed with China is a small positive for the outlook to the extent that it removes the threat of further tariffs. But we doubt the rollback of existing tariffs... 16th December 2019 · 3 mins read
US Economics Update Fed begins prolonged hold The Fed called time on its easing cycle today by leaving the fed funds target range unchanged at 1.50%-1.75% and striking a more upbeat tone in the policy statement. With economic growth stabilising... 11th December 2019 · 3 mins read
US Economics Update Productivity growth may still be accelerating Recent payroll employment growth is likely to be revised down in the annual revision early next year, which is unquestionably a negative. But the flip-side is that productivity growth must have been... 4th December 2019 · 2 mins read
US Economics Update Recession Watch (Nov.) The risk of a recession occurring within the next year appears to have faded – with the yield curve un-inverting, financial conditions loosening and the incoming economic data still comfortably above... 20th November 2019 · 4 mins read
US Economics Update Fed Senior Loan Officer Survey (Q4) The Fed’s latest Senior Loan Officer survey points to a continued drop off in demand for commercial and industrial loans, consistent with business equipment investment contracting again in the fourth... 5th November 2019 · 2 mins read
US Economics Update Fed cuts rates, but draws line under further loosening The Fed cut interest rates for a third time as expected today, to between 1.5% and 1.75%, but changes in the statement suggest it is trying to dissuade the markets from pricing in any further... 30th October 2019 · 3 mins read
US Economics Update Recession Watch (Oct.) With the yield curve un-inverting, our composite model indicates that the probability of a recession in 12 months’ time has fallen to 11.7%, from a recent peak of more than 20%. Nevertheless, we... 28th October 2019 · 4 mins read
US Economics Update Fed’s balance sheet heading back above $4trn The Fed’s move to begin purchasing $60bn of Treasury bills per month will eventually push the size of its balance sheet back up to $4trn over the coming year, not far below its $4.2trn peak. However... 16th October 2019 · 5 mins read
US Economics Update GM strike will deepen the manufacturing downturn The strike at General Motors, together with continued problems at Boeing, means that the incoming manufacturing data over the next month or two will go from bad to terrible. That is another reason to... 9th October 2019 · 3 mins read
US Economics Update What to make of the diverging manufacturing surveys Other surveys suggest that the ISM manufacturing index is over-playing the extent of the factory-sector slowdown. But the wider evidence suggests the outlook for manufacturers is still pretty poor. 7th October 2019 · 2 mins read
US Economics Update Recession Watch (Sep.) Our composite model suggests that the risk of a recession in 12-months’ time has fallen slightly to 17.9%, from above 20% a few weeks ago, as the rebound in the 10-year Treasury yield has reduced the... 23rd September 2019 · 4 mins read
US Economics Update Services exports are collateral damage in trade war With attention focused on the impact of tariffs on goods trade, the recent decline in services exports has gone largely unnoticed. But that has already knocked a few tenths off GDP growth and, with... 23rd September 2019 · 4 mins read
US Economics Update Fed split deepens The Fed voted to cut its key policy interest rate by an additional 25bp today, to between 1.75% and 2.00%, but the FOMC is more split than ever over what to do next. 18th September 2019 · 3 mins read
US Economics Update Trump may not like negative rates in practice President Donald Trump’s call for the Fed to slash interest rates to zero or “less”, so that the Treasury can lock-in low borrowing costs for the very long term, sounds appealing in a sustained low... 11th September 2019 · 4 mins read
US Economics Update NFIB survey points to worrying drop-off in investment The latest NFIB and JOLT surveys point to a drop in business equipment investment over the rest of the year and provide more evidence that labour market conditions are no longer tightening. 10th September 2019 · 2 mins read
