US Fed Watch Still on track for a December hike Although the Fed is unlikely to make any policy changes at next week’s meeting, we expect the statement to reiterate the FOMC’s plan to continue gradually raising interest rates, with the next move... 31st October 2018 · 1 min read
Global Central Bank Watch Equity sell-off unlikely to derail policy tightening Despite the recent plunge in equity prices, it looks highly likely that the Fed will raise interest rates again in December and then press ahead with two more rate hikes in the first half of 2019. But... 31st October 2018 · 1 min read
Global Economics Update UK budget not a sign of global policy loosening The fiscal “giveaway” announced by the UK government yesterday has generated a lot of headlines, but it is trivial in a global context, or compared to the US stimulus. For advanced economies overall... 30th October 2018 · 1 min read
US Housing Market Data Response Homeownership & Vacancy Rates (Q3) After rising for eight consecutive quarters, the homeownership rate was unchanged in the third quarter. A lack of homes for sale, and higher interest rates weighing on home demand, help explain why... 30th October 2018 · 1 min read
US Housing Market Data Response Case-Shiller House Prices (Aug.) The apparent rebound in house price pressures, implied by the 0.6% m/m rise in August, reflects issues with the seasonal-adjustment process, rather than a sign that the slowdown in house price growth... 30th October 2018 · 1 min read
Global Markets Update US equities and the economy: squaring the circle While this month’s slump in the US stock market can’t be blamed on bad economic news, it can be attributed – at least in part – to concerns about the prospects for economic growth. We think that these... 30th October 2018 · 1 min read
US Economics Update Midterms unlikely to lead to another fiscal stimulus With the Democrats likely to win control of the House, while the Republicans maintain a slim majority in the Senate, the chances of another fiscal stimulus being agreed after the midterm elections... 29th October 2018 · 1 min read
US Economics Update Fed’s monetary framework requires more tweaks With the effective fed funds rate getting close to the top of its target range again, there’s a good chance that the Fed will combine a 25bp hike in the fed funds target range in December with another... 29th October 2018 · 1 min read
US Economics Weekly Shifting policy mix means it’s all downhill from here The recent slump in stock markets is hard to square with the 3.5% annualised gain in third-quarter GDP that follows an even more impressive 4.2% rise in the second. Looking at the details of that... 26th October 2018 · 1 min read
US Data Response GDP (Q3 1st Estimate) At 3.5% annualised, GDP growth remained unusually strong in the third quarter, thanks partly to this year’s fiscal stimulus, but there are signs that higher interest rates are beginning to have a... 26th October 2018 · 1 min read
Global Economics Focus Will tighter monetary policy cause the next big downturn? We expect the Fed’s monetary policy tightening cycle, which is now well underway, to contribute to a slowdown in the US economy during 2019-2020. And tighter monetary policy may also trigger downturns... 26th October 2018 · 1 min read
US Employment Report Preview Hurricanes may mask the strength of payrolls We estimate that non-farm payroll gains rebounded to 185,000 in October, but this may be skewed by the uncertain impacts of Hurricane Florence and Hurricane Michael. The bigger picture is that... 25th October 2018 · 1 min read
US Housing Market Update Rise in adjustable-rate mortgage share not a concern Rising interest rates have led to an increase in the share of mortgages originated with an adjustable rate (ARMs). But the market share is still small, and the products have not been targeted at... 25th October 2018 · 1 min read
US Data Response Durable Goods & Advance Economic Indicators (Sep.) The September durable goods data confirm that equipment investment growth rebounded in the third quarter, although the recent slowdown in new orders growth suggests that strength won’t be sustained. 25th October 2018 · 1 min read
Commodities Update What a US slowdown would mean for commodities The economic slowdown that we expect in the US over the next few years is a key factor in our generally downbeat outlook for commodity prices. 25th October 2018 · 1 min read
Metals Data Response Global Steel Production (Sep.) Growth in global steel production accelerated in September to 4.4% y/y, with mills ramping up in China and the US buoyed by healthy margins in both countries. We expect winter production cuts in China... 24th October 2018 · 1 min read