US Employment Report Preview Payrolls will be unaffected by shutdown We expect a solid 190,000 gain in non-farm payrolls in January which, because a bill has already been passed guaranteeing workers back pay when the government reopens, will be largely unaffected by... 24th January 2019 · 1 min read
US Fed Watch Fed to reverse course in 2020 The Fed will leave rates unchanged next week and may well include references to being “patient” in the policy statement and post-meeting press conference, to signal more clearly that a March rate hike... 23rd January 2019 · 1 min read
US Housing Market Data Response FHFA House Prices (Nov.) Annual house price growth was unchanged at 5.8% in November, but it is likely to resume its downward trend in 2019. While mortgage interest rates are set to fall back, a slowing economy will weigh on... 23rd January 2019 · 1 min read
US Chart Pack Shutdown clouds the near-term outlook The Federal government shutdown has made it harder than usual to judge how the economy is performing, but the data that have been released have been fairly upbeat. The surge in payroll employment and... 22nd January 2019 · 1 min read
US Housing Market Data Response Existing Home Sales (Dec.) Strong mortgage demand over the past couple of weeks indicates that the sharp fall in existing home sales in December will soon be reversed. But a slowing economy, weakening house price expectations... 22nd January 2019 · 1 min read
US Economics Focus Does the Fed have the tools to fight the next recession? There are good reasons to believe the next recession will be modest, which means that, even though the nominal interest rate would probably hit the near-zero lower bound again, the Fed should have the... 22nd January 2019 · 1 min read
Global Economics Update US policy rates to fall in 2020 The Fed’s promise to be “patient” is why we now forecast just one additional rate hike in the first half of this year, with the fed funds rate peaking at 2.50-2.75%. But we are increasingly confident... 18th January 2019 · 1 min read
US Economics Update Fed will need to cut rates again before long The Fed’s promise to be “patient” is why we now forecast just one additional rate hike in the first half of this year, with the fed funds rate peaking at 2.50-2.75%. But we are increasingly confident... 18th January 2019 · 1 min read
US Data Response Industrial Production (Dec.) The 1.1% surge in manufacturing output in December, which admittedly was boosted by some temporary factors, suggests that US is not (yet) succumbing to the global industrial slowdown. 18th January 2019 · 1 min read
US Economics Weekly Shutdown costs continue to mount We have long argued that, rather than trade policy, an extended Federal government shutdown would be the key downside risk to the economy this year. Sure enough, the current stand-off is already the... 18th January 2019 · 1 min read
US Housing Market Update Earnings accelerate, but rents won’t follow suit The acceleration in earnings growth to close to a 10-year high in December will not boost rental growth. While stronger earnings will support rental demand, the large number of new apartments being... 17th January 2019 · 1 min read
Energy Data Response US Weekly Petroleum Status Report US crude stocks fell for the second consecutive week, despite an increase in production and a lower input to refineries. And the further build in gasoline and distillate stocks suggest softening... 16th January 2019 · 1 min read
US Economics Update Global slowdown adds to domestic headwinds Weaker global growth and the stronger dollar will cause a marked slowdown in US export growth this year. Alongside the domestic headwinds from the fading fiscal stimulus and tighter monetary policy... 16th January 2019 · 1 min read
US Housing Market Update Why our house price forecast is bottom of the pack Our forecast for a rise in house prices of 2% in 2019 is close to the bottom of consensus. That view is supported by evidence that housing market conditions have loosened, and that the size of... 15th January 2019 · 1 min read
US Economics Weekly How patient will the Fed be? With financial markets rebounding this week and the incoming domestic activity data relatively strong, we still expect the “patient” Fed to raise interest rates this year. But core PCE inflation looks... 11th January 2019 · 1 min read
US Data Response Consumer Prices (Dec.) The 0.1% m/m fall in headline consumer prices in December won’t concern the Fed as it can be explained by the plunge in gasoline prices. But the 0.2% m/m gain in core prices, which left the core CPI... 11th January 2019 · 1 min read
