US Economics Update Rebound in healthcare inflation a headache for the Fed The rebound in core PCE inflation over recent months in part reflects sharp increases in administered payments for hospital services that will be repeated later this year. A revival in healthcare... 30th April 2018 · 1 min read
US Economics Update The fading impact of the opioid crisis The opioid crisis is still costing lives and devastating communities, but its impact on the labour market is at least beginning to fade. The sharp fall in prescription rates last year suggests that... 25th April 2018 · 1 min read
US Economics Update China Treasury holdings offer little leverage in trade spat China’s holdings of Treasury securities, which currently stand at almost $1.2trn equivalent to 8.2% of the total outstanding, offer it little leverage in the current trade spat with the US. Dumping... 12th April 2018 · 1 min read
US Economics Update NFIB survey reveals rising cost pressures The latest NFIB survey suggests the recent tax cuts aren’t providing much support to investment. But along with the March PPI data, it also provides further evidence that inflationary pressures are... 10th April 2018 · 1 min read
US Economics Update Recent stimulus worsens fiscal woes The latest CBO projections suggest that the recent fiscal stimulus will push the Federal budget deficit up to 5% of GDP soon. Moreover, there are reasons to expect the actual outcome could be even... 9th April 2018 · 1 min read
US Economics Update Declaration of (trade) war? The speed and scale of China’s retaliation to the proposed US tariffs represents a significant escalation of tensions, though there is still plenty of time for a deal to be struck before tariffs come... 4th April 2018 · 1 min read
US Economics Update Core PCE inflation to hit 2% very soon Although the annual core PCE inflation rate only edged higher to 1.6% in February there is now a good chance that base effects will push it up to 2.0% in March, leaving it in line with the Fed’s... 29th March 2018 · 1 min read
US Economics Update Monetary Indicators Monitor (Feb.) The gradual contraction of the Fed’s balance sheet is now starting to weigh on the monetary aggregates. Nonetheless, there are good reasons to expect bank lending growth to rebound soon. 28th March 2018 · 1 min read
US Economics Update How big a deal are the China tariffs? The tariffs on Chinese imports outlined by President Donald Trump today won’t have a huge impact on the economy even if implemented in full, and we suspect they will end up being watered down. But as... 22nd March 2018 · 1 min read
US Economics Update Powell era begins on a hawkish note The Fed’s decision to raise interest rates by 25bp today was widely expected but some investors may have been caught off-guard by the degree to which Fed officials increased their projections for... 21st March 2018 · 1 min read
US Economics Update Trump, tariffs and protectionism Developments over the past couple of weeks suggest that President Donald Trump might finally be following through on the protectionist threats he made during the election campaign. The measures... 7th March 2018 · 1 min read
US Economics Update Monetary Indicators Monitor (Jan.) The reduction in the Fed’s balance sheet has begun to gather pace but is still having next to no impact on the monetary aggregates, suggesting that the effect on the broader economy will also be small... 6th March 2018 · 1 min read
US Economics Update Steel tariffs risk retaliatory action President Donald Trump’s announcement today that the US will impose major new tariffs on steel and aluminium imports didn’t come as a huge surprise, since the Commerce Department’s recent 232 report... 1st March 2018 · 1 min read
US Economics Update Weaker dollar is here to stay After depreciating by almost 10% in trade-weighted terms since the beginning of 2017, we suspect that the dollar is set to remain relatively stable over the next few years. The depreciation already... 20th February 2018 · 1 min read
US Economics Update NFIB survey points to faster wage growth The January NFIB small business survey paints an upbeat picture of economic activity, but it also suggests that the markets are right to focus on the prospect of faster wage growth this year. 13th February 2018 · 1 min read
US Economics Update Pick-up in wage growth a weather-related distortion The reported acceleration in wage growth last month, which triggered the recent market sell-off, was nothing more than a weather-related distortion. The unseasonably cold January explains both the... 6th February 2018 · 1 min read
