US Economics Weekly Easing financial conditions pose a problem for the Fed Despite long-term Treasury yields rising sharply this week to their highest level in four years, broader measures suggest that overall financial conditions have actually continued to loosen. Corporate... 2nd February 2018 · 1 min read
US Economics Weekly Are we underestimating the impact of the tax cuts? The surge in the stock market and wave of firms announcing wage increases and bonuses since the Tax Cut and Jobs Act passed have fuelled optimism that tax cuts are reviving “animal spirits” and... 26th January 2018 · 1 min read
US Economics Weekly Political risks back on the menu Congress may still avoid a partial government shutdown this weekend if another short-term continuing resolution squeaks through a Senate vote. That will keep the lights on for another month, but a... 19th January 2018 · 1 min read
US Economics Weekly 2018 maybe not a slam dunk after all The tightening of financial conditions this week provided a timely reminder of the downside risks to the economy this year and next. 2018 won’t necessarily be the slam dunk that many are assuming. The... 12th January 2018 · 1 min read
US Economics Weekly Investment boom should continue in 2018 Business investment enjoyed a strong resurgence last year, particularly in the second half. Our estimates imply that business investment increased by 7.5% annualised in the fourth quarter, the biggest... 5th January 2018 · 1 min read
US Economics Weekly 2018: How can it all go wrong? Our forecast that GDP growth will accelerate to 2.5% next year is boringly in line with the consensus. Given the constellation of positive factors boosting economic growth, however, it’s hard to be... 22nd December 2017 · 1 min read
US Economics Weekly Inflation rebound will force the Fed to tighten further The subdued November CPI figures and the news that the Fed left its inflation and interest rate projections unchanged triggered a mini-rally in the bond markets, but arguably investors should be... 15th December 2017 · 1 min read
US Economics Weekly How much further can the labour market tighten? The Fed is almost certain to raise interest rates at the conclusion of its policy meeting next week and, against a backdrop of tightening labour market conditions and gradually rising wage inflation... 8th December 2017 · 1 min read
US Economics Weekly Rebound in profit share unlikely to last Our forecast that the S&P 500 will do no better than trend sideways for the next year is based on our belief that, with the unemployment rate at a 17-year low, most of the gains in nominal GDP next... 1st December 2017 · 1 min read
US Economics Weekly Does the flatter yield curve signal a recession? The flattening of the yield curve over the past couple of months is not a signal that a recession is on the way. Instead, it is mainly due to a drop back in the term premium on longer-dated bonds... 22nd November 2017 · 1 min read
US Economics Weekly Is another household debt problem brewing? Households’ balance sheets are in good shape; debt as a share of income has remained stable, net wealth is at a record high, and debt service costs are below their long-run average. However, the... 17th November 2017 · 1 min read
US Economics Weekly Recovery in business investment still has further to run The rapid pace of business investment growth so far this year may be unsustainable, but there is little reason to fear anything worse than a modest slowdown any time soon. The near-term prospects for... 10th November 2017 · 1 min read
US Economics Weekly Are the poor drowning in debt as the rich get richer? The contrarian wisdom is that even if the aggregate debt-to-income ratio has fallen sharply in recent years, it masks financial stresses for those on low incomes, since most of the gains in income... 3rd November 2017 · 1 min read
US Economics Weekly Fed to raise rates faster in 2018, no matter who’s Chair Regardless of who is nominated to be the next Fed Chair, we expect a rebound in core inflation will prompt the Fed to raise interest rates four times in 2018. The components that have dragged core CPI... 27th October 2017 · 1 min read
US Economics Weekly Race to be next Fed Chair enters closing stages The markets are right to remain relatively sanguine over the upcoming decision on who will be the next Fed Chair, since the Fed’s low rate regime will probably continue with President Donald Trump... 20th October 2017 · 1 min read
US Economics Weekly Employment growth will continue to trend lower Even putting aside the hurricane-related fall in payroll employment in September specifically, trend employment growth has been gradually slowing for more than two years now. The surge in job openings... 13th October 2017 · 1 min read
