US Economics Update Non-manufacturing will continue to outperform The ISM non-manufacturing survey gets much less attention than its older manufacturing brother even though the non-manufacturing sectors account for a much larger share of GDP. And if these sectors... 7th September 2012 · 1 min read
US Economics Update Is the stock market cheering for Obama? The close relationship between President Obama’s chances of re-election and the level of the S&P 500 appears to suggest that the stock markets favour a Democrat as President. But it is important not... 6th September 2012 · 1 min read
US Economics Update Bernanke further paves the path towards QE3 Fed Chairman Ben Bernanke used his speech at Jackson Hole today to state that unconventional monetary policy does work and that the US needs more of it. It now appears even more likely that at the... 31st August 2012 · 1 min read
US Economics Update GDI may be a more robust, and worrying, measure of growth The alternative gross domestic income (GDI) measure of output suggests that the US economy is hardly growing at all. What’s more, there are a couple of reasons why GDI may be a more robust and more... 29th August 2012 · 1 min read
US Economics Update US Banks continue to strengthen balance sheets According to the latest data from the FDIC, US banks continued to benefit from shrinking loan losses in the second quarter, which allowed them to maintain a high capital ratio even as they expanded... 29th August 2012 · 1 min read
US Economics Update Fed minutes suggest QE3 is a done deal The minutes from the last FOMC meeting at the start of this month strongly suggest that the Fed will launch a third round of quantitative easing at the upcoming meeting in mid-September. While QE3... 23rd August 2012 · 1 min read
US Economics Update Monetary Indicators Monitor (Jul.) The annual growth rates of the narrower M1 and M2 monetary aggregates have slowed a little, but our own measure of M3, the broadest aggregate, is still growing at an annual rate of 4.5%. 20th August 2012 · 1 min read
US Economics Update Fed will want to satisfy surging mortgage demand The surge in demand for residential mortgages reported by the Fed’s latest Senior Loan Officer Survey could further encourage the FOMC to launch QE3, and perhaps some kind of Funding for Lending... 7th August 2012 · 1 min read
US Economics Update US set for a couple more years of sluggish growth We no longer believe that US economic growth will accelerate as much next year. The continued drag from the crisis in the euro-zone and the risk that America hits a fiscal cliff at the end of this... 2nd August 2012 · 1 min read
US Economics Update Here's what the Fed should do next... The more we think about this from the perspective of what the Fed is ultimately trying to achieve, the more we're convinced that the best option would be a cut in the interest rate payable on excess... 2nd August 2012 · 1 min read
US Economics Update Fed stands pat, but offers hint of further action soon Despite acknowledging the evident slowdown in US economic growth, the Fed declined to take any additional action at the conclusion of the two-day FOMC meeting today. It did, however, offer a hint that... 1st August 2012 · 1 min read
US Economics Update The economy does not have a “stall speed” The economy does not have a “stall speed” of between 1.5% and 2.0% that means whenever growth falls below this rate a recession is imminent. This is especially the case when the economy current has so... 31st July 2012 · 1 min read
US Economics Update Drought not much of a drain on US economy The drought in parts of America is unlikely to have a major economic impact. At most, the resulting rise in agricultural commodity prices will reverse only a small part of the recent fall in inflation... 24th July 2012 · 1 min read
US Economics Update Fed could launch its own "funding for lending" scheme Joining the dots, it is becoming clear that the Fed, and its Chairman Ben Bernanke in particular, are considering launching a US version of the Bank of England's new Funding for Lending Scheme (FLS)... 18th July 2012 · 1 min read
US Economics Update Bernanke acknowledges slowdown, but no QE3 hint Fed Chairman Ben Bernanke acknowledged in his congressional testimony today that the incoming economic data had been "generally disappointing", but offerred no hint that the FOMC was close to... 17th July 2012 · 1 min read
US Economics Update Monetary Indicators Monitor (Jun.) The various monetary aggregates show broad money growth is both strong and stable which, at the margin, makes a third round of quantitative easing look less warranted. In contrast, our own M3 measure... 17th July 2012 · 1 min read
