US Economics Weekly Immaculate disinflation almost complete It is hard to say which is more remarkable: that GDP growth accelerated last year following the Fed’s most aggressive tightening campaign in decades, or that core inflation nevertheless fell back to... 26th January 2024 · 6 mins read
US Economics Weekly Could disinflation go too far? We argued last week that there was little to support the idea that the “last mile” of getting inflation back to 2% will somehow be the hardest. But new data on rent inflation released this week raise... 19th January 2024 · 7 mins read
US Economics Weekly Trump faces first test in Iowa Donald Trump is still the prohibitive favourite to win the Republican presidential nomination. But the Iowa caucuses, which kick off the primary season this coming Monday, should provide insight into... 12th January 2024 · 8 mins read
US Economics Weekly Fed still coy about QT end-game The minutes of the mid-December FOMC meeting did not dissuade us that the Fed will start to cut interest rates from this March onwards. Despite now projecting more interest rate cuts this year, Fed... 5th January 2024 · 6 mins read
US Economics Weekly Fed hawks can’t compete with plunging inflation This week saw a renewed attempt from some Fed officials to push back against market expectations for interest rate cuts but, with core PCE inflation running at an annualised pace of below 2% over the... 22nd December 2023 · 8 mins read
US Economics Weekly Fed & markets catching up with inflation reality The Fed’s embrace of interest rate cuts next year is understandable when the latest data suggest that core PCE inflation is rapidly closing in on the 2% target. 15th December 2023 · 6 mins read
US Economics Weekly Markets call the Fed's bluff on higher for longer The Fed may not be quite ready to abandon its tightening bias at this week’s FOMC meeting, but the markets are no longer buying its “higher for longer” mantra. The main factor behind the shift in... 8th December 2023 · 7 mins read
US Economics Weekly Despite strong growth, core inflation normalising This week’s modest upward revision to third-quarter GDP growth was certainly eye-catching. It suggests that the US economy is not just surviving the surge in interest rates over the last couple of... 1st December 2023 · 7 mins read
US Economics Weekly Post SVB bank lending holding up well The SVB crisis back in mid-March sparked fears of a credit crunch, particularly among regional banks who are the principal source of funding for commercial real estate. Post-SVB, while the Fed’s... 22nd November 2023 · 6 mins read
US Economics Weekly Falling inflation prompts rate cut speculation The release of the slightly-better-than-expected October CPI data earlier this week triggered a massive reaction in markets. 17th November 2023 · 6 mins read
US Economics Weekly Energy disinflation; credit conditions still tight Despite the ongoing war in the Middle East, crude oil prices have slumped. The upshot is that headline CPI inflation, which rebounded from a low of 3.1% in June to 3.7% in September, should be back... 10th November 2023 · 8 mins read
US Economics Weekly Fourth quarter bringing renewed slowdown There is now mounting evidence that the economy is set for a renewed slowdown in the fourth quarter and that inflationary pressures from the labour market continue to ease. Although markets have... 3rd November 2023 · 6 mins read
US Economics Weekly Has the AI productivity boom already begun? While we are optimistic about the prospects for an AI-related boom in productivity over the next decade, it’s hard to tell whether the current pick-up in growth is a genuine structural acceleration or... 27th October 2023 · 7 mins read
US Economics Weekly Third-quarter strength unlikely to last The apparent strength of third-quarter GDP growth won’t convince the Fed to resume hiking its policy rate, particularly with the ongoing surge in long-term bond yields presenting a growing threat to... 20th October 2023 · 8 mins read
US Economics Weekly Case for final Fed hike continues to weaken There appears to be growing support at the Fed for the idea that the recent sell-off in long-term Treasuries reduces the need for further policy rate hikes, but the more persuasive reason for the Fed... 13th October 2023 · 8 mins read
US Economics Weekly Rising long rates a fiscal rather than monetary problem The conventional wisdom is that the recent surge in Treasury yields is a reaction to the Fed’s “higher for longer” message. But that surge has been focused solely on the long end of the curve... 6th October 2023 · 7 mins read
