US Economics Update Which inflation measure should the Fed focus on? The Fed's preferred PCE measure of core inflation is being depressed by declines in the administered prices set by Congress for Medicare and Medicaid. In contrast, the CPI measure, which covers only... 28th May 2015 · 1 min read
US Economics Update Monetary Indicators Monitor (Apr.) Broad money growth has slowed slightly, with the annual growth rate of our M3 measure falling to a six-month low of 5.6% in April. More importantly, however, the growth rate of bank loans continues to... 27th May 2015 · 1 min read
US Economics Update Fed acknowledges first-quarter slowdown The latest FOMC statement released today suggests that Fed officials still believe economic growth and inflation will rebound. But until they see evidence of such a rebound, which could take another... 29th April 2015 · 1 min read
US Economics Update Monetary Indicators Monitor (Mar.) With broad money growth expanding at close to 6% over the past year and bank loans growing at an even faster 8%, there is little evidence of a sustained slowdown in real economic growth or price... 20th April 2015 · 1 min read
US Economics Update Wacky weather According to the National Climatic Data Center, we now know that the Northeast suffered its coldest winter ever this year. At the same time, the West Coast saw record high average temperatures. The... 10th April 2015 · 1 min read
US Economics Update US recovery still firmly on track Rumours of the demise of the US economy have been greatly exaggerated. The run of weaker economic data hasn't shaken our belief that, now credit is flowing more freely and the fiscal drag has faded... 7th April 2015 · 1 min read
US Economics Update Yellen, Bernanke and the equilibrium real rate In an attempt to justify leaving the fed funds rate at near-zero until some time later this year, Fed Chair Janet Yellen last week hinted that she thought the current equilibrium (or neutral) real... 31st March 2015 · 1 min read
US Economics Update Monetary Indicators Monitor (Feb.) The further acceleration in broad money growth in February is indicative of a strengthening real economic recovery that will eventually put more upward pressure on underlying inflation. The annual... 24th March 2015 · 1 min read
US Economics Update Are lower oil prices a net negative for the US after all? Our initial view that lower oil prices would be a net positive for the real economy is not borne out in the first quarter data. The negative impact on mining investment almost outweighed the positive... 20th March 2015 · 1 min read
US Economics Update Is the US headed for another weather-related contraction? Even after the run of weaker economic data for February, we still expect first-quarter GDP growth to be close to 2.0% annualised. It is pretty obvious by now that, for the second year in a row, the... 19th March 2015 · 1 min read
US Economics Update Fed drops "patient" but also lowers rate projections Although the Fed dropped its pledge that it could be "patient" in beginning to normalise monetary policy, paving the way for a June lift-off, the substantial downgrades to the interest rate forecasts... 18th March 2015 · 1 min read
US Economics Update Yellen positions the Fed for a June rate hike Chair Janet Yellen's prepared congressional testimony, which struck a more upbeat tone on labour market conditions and included a detailed discussion of how the forward guidance will be amended... 24th February 2015 · 1 min read
US Economics Update Monetary Indicators Monitor (Jan 15) The strong pace of growth in both broad money and bank loans is another reason to believe that the temporary bout of negative inflation, which almost certainly began last month, will not develop into... 20th February 2015 · 1 min read
US Economics Update NFIB & JOLT surveys highlight labour market strength The latest NFIB and JOLT surveys point to further strong job gains and a pick-up in wage growth. 10th February 2015 · 1 min read
US Economics Update Tax on profits held abroad could be worth 1.5% of GDP The funds raised by President Obama’s proposals to tax foreign earnings could, in theory, provide a 1.5% boost to GDP. Despite tax reform being a shared goal of both parties, however, there is no... 2nd February 2015 · 1 min read
US Economics Update Wage puzzle not explained by mix of jobs created The lack of any meaningful pick-up in the growth rate of average hourly earnings over the past 12 months, even as the unemployment rate has fallen below 6%, is not because of the poor quality of the... 28th January 2015 · 1 min read
