US Economics Weekly Return to a gold standard neither practical nor desirable The historical experience of the gold standard is that countries often saw periodic declines in their gold stocks, which triggered either a corresponding contraction in money or a hike in interest... 10th September 2012 · 1 min read
US Economics Weekly Is the fiscal cliff already dampening activity? Although the tax hikes and spending cuts that constitute the fiscal cliff aren’t due to take place until the start of next year, businesses are increasingly stating that the resulting fiscal... 31st August 2012 · 1 min read
US Economics Weekly Fiscal policy stuck between a rock and a hard place Many Fed officials appear increasingly concerned that the uncertainty surrounding the outlook for fiscal policy is already starting to curb household and business spending. Unless Congress acts, a... 24th August 2012 · 1 min read
US Economics Weekly Uptick in incoming data not enough to sway the Fed Since the Fed signalled at the last FOMC meeting three weeks ago that it was poised to act, the incoming economic data have, somewhat ironically, suddenly started to improve. Despite the recent uptick... 17th August 2012 · 1 min read
US Economics Weekly Drought a small, but unhelpful, drain on growth The loss of corn and soybean crops caused by the drought may reduce annual GDP growth by less than 0.1%. The drought is therefore not a disaster for the wider economy. But it doesn’t help when the... 10th August 2012 · 1 min read
US Economics Weekly Fed will do more, but QE3 is not the best option We now think that the Fed will provide more policy stimulus when the FOMC next meets in September. The most likely scenario is a third round of asset purchases (QE3), this time focusing on mortgage... 3rd August 2012 · 1 min read
US Economics Weekly Full nationalisation could be required to boost lending The Bank of England’s new Funding for Lending Scheme (FLS) got underway last week. If the FLS doesn’t work, more radical action to boost bank lending will be needed. 3rd August 2012 · 1 min read
US Economics Weekly Rising dollar another drag on growth The recent increase in the dollar, to close to a two-year high against the euro, represents another headwind for US exporters when they already have to contend with the easing in demand in Europe and... 27th July 2012 · 1 min read
US Economics Weekly QE3 now a 50-50 call It is a very close call as to whether the Fed will launch a third round of large-scale asset purchases in the second half of this year. We expect growth to continue slightly below the economy's... 20th July 2012 · 1 min read
US Economics Weekly Bernanke to take centre stage This week's congressional testimony from Fed Chairman Ben Bernanke will be closely watched for hints that the FOMC is any closer to launching a third round of large-scale asset purchases. Even though... 13th July 2012 · 1 min read
US Economics Weekly No need to fear another recession Although it is very clear that the US economy has lost a lot of momentum, there are no real indications that it will soon come to a complete standstill or even go into reverse. The latest ISM surveys... 9th July 2012 · 1 min read
US Economics Weekly Industry easing, but housing healing It is striking just how quickly the easing in demand in Europe and certain parts of Asia has taken a toll on America’s industrial recovery. Thankfully, other parts of the economy have been affected by... 29th June 2012 · 1 min read
US Economics Weekly Fed still reluctant to launch QE3 The Fed appears to be edging closer to launching a third round of asset purchases (QE3), but it will not pull the trigger unless the economy loses more momentum and/or the threat to US financial... 25th June 2012 · 1 min read
US Economics Weekly Slowdown not that much of an exaggeration Chairman Ben Bernanke recently appeared to play down the need for more action from the Fed, arguing that the extent of the US slowdown may have been "exaggerated". Looking at the pattern of the... 18th June 2012 · 1 min read
US Economics Weekly Households snap up Treasuries Households appear to be making a concerted effort to hold safer assets. In fact, in the first quarter they bought more Treasuries than the Fed and overseas investors combined. Should foreign appetite... 11th June 2012 · 1 min read
US Economics Weekly Banks benefiting from falling loan defaults The economy's recent performance looks better if we measure it using aggregated incomes rather than expenditures. Gross domestic income increased by 2.7% annualised in the first quarter, easily... 4th June 2012 · 1 min read
