US Economics Update Monetary Indicators Monitor (Jul.) The sharp acceleration in money growth in July is not a result of the Fed's loose monetary policies but instead has been driven by investors moving out of equities and/or Treasuries and into cash... 18th August 2011 · 1 min read
US Economics Update Fed's longer low rate pledge won't change much The Fed's pledge to keep interest rates exceptionally low for much longer than previously won't significantly boost the real economy. Admittedly, the chances of QE3 have risen. But the rebound in core... 10th August 2011 · 1 min read
US Economics Update Loss of US AAA rating shouldn't be a complete disaster The news that S&P finally pulled the trigger by cutting America's long-term credit rating from AAA to AA+ will surely rock the financial markets when they open on Monday. But any spike in Treasury... 6th August 2011 · 1 min read
US Economics Update Financial market moves could take 0.5% off GDP growth If the recent financial market moves are sustained, the net effect could be to reduce annualised GDP growth by around 0.5%. That would not tip the US into recession. But it supports our long-held view... 6th August 2011 · 1 min read
US Economics Update Revision to 2011 GDP forecast not due to debt ceiling deal We now expect the US economy to grow by just 2% this year, down from our previous forecast of 2.5%. Growth in 2012 is unlikely to be any better. This downward revision has nothing to do with the... 3rd August 2011 · 1 min read
US Economics Update Default seemingly averted, but downgrade almost certain The latest noises from Washington suggest that politicians are close to reaching a compromise on a deal that will raise the debt ceiling ahead of Tuesday night, thereby preventing a debt default and a... 1st August 2011 · 1 min read
US Economics Update What if the US defaults? We still think that the US government is unlikely to default on its debt. But if it did, the implications would potentially be far more serious than those that would follow a one or two notch... 26th July 2011 · 1 min read
US Economics Update What if the US loses its AAA rating? A downgrade of US government debt would not necessarily be disastrous for Treasuries or the dollar, at least once the dust settled. However, it would be the starkest warning yet that the fall-out from... 23rd July 2011 · 1 min read
US Economics Update Plenty of deficit reduction plans, but still no agreement An agreement to raise the debt ceiling still appears to be some way off, but not for lack of trying. Every day seems to bring a new deficit reduction plan. With the clock ticking, we doubt there is... 21st July 2011 · 1 min read
US Economics Update Monetary Indicators Monitor (Jul.) The annual growth rate of our own Capital Economics measure of the M3 aggregate hit a two-year high of 4.9% in June, while the growth rates of both M1 and M2 continued to rise as well. 19th July 2011 · 1 min read
US Economics Update Fed biding its time The statement issued today after the end of the two-day FOMC meeting offered no hint that the recent signs of a renewed economic slowdown might tempt the Fed to launch another round of large-scale... 23rd June 2011 · 1 min read
US Economics Update Monetary Indicators Monitor (May) The annual growth rate of money, including our own Capital Economics' measure of the M3 aggregate, continued to accelerate in April, mainly in response to the Fed's quantitative easing. But with QE2... 15th June 2011 · 1 min read
US Economics Update Monetary Indicators Monitor (Apr.) The annual growth rate of money, including our measure of the M3 aggregate, continued to accelerate in April. Nevertheless, at a time when T-bill rates have fallen even closer to zero, we suspect this... 16th May 2011 · 1 min read
US Economics Update Fed's survey shows diverging demand for loans The Fed's latest survey of Senior Loan Officers shows a rapidly widening divergence between the strengthening demand for commercial loans and the falling demand for residential mortgages. 2nd May 2011 · 1 min read
US Economics Update Fed in no hurry to tighten policy In his first post-FOMC meeting press conference, Chairman Ben Bernanke gave the impression that the Fed is in no hurry to tighten monetary policy. 27th April 2011 · 1 min read
US Economics Update Hard to argue with negative outlook on US AAA credit rating Given the size of the US Federal deficit, which will be close to 10% of GDP this year, and the daunting medium-term fiscal challenges, it is hard to argue with S&P's decision to put a negative outlook... 18th April 2011 · 1 min read
