As firms and households await the expected increase in import taxes through a flurry of executive orders over the next several days, it is important to note just how challenging it will be to estimate their impact on growth, employment and inflation. Modeling such a shock to the economy depends upon ... READ MORE >
Morning market minute: How tariffs fall harder on lower-income households
Economic inequality in the United States has been a fact of life for decades. And the tariffs that President-elect Donald Trump is proposing will fall squarely on the shoulders of U.S. households, particularly those with lower incomes. Read RSM's global economic outlook in the latest issue of The ... READ MORE >
Morning market minute: Regime change and financial conditions
Regime change continues to be the foundation of our analytical framework for the post-pandemic economy. Secular stagnation that for years featured low inflation, low interest rates and plentiful capital has been replaced by competition for capital, higher inflation and higher interest rates. During ... READ MORE >
Inflation improvement stalled in December ahead of price increases
Stalled improvement in the December consumer price index appears to be the growing consensus among policymakers and investors as they await turn-of-the-year price increases. The expected adoption of expansionary fiscal policies, as well as greater restrictions on immigration, are pointing toward ... READ MORE >
Morning market minute: The tax over policy uncertainty is rising
It’s no mystery that rising uncertainty over the new presidential administration’s policies is one of the major risks to financial markets and the economic outlook. Volatility across asset markets has been rising, and is poised to continue increasing, as investors adjust to changes in fiscal, trade and ... READ MORE >
Morning market minute: Emerging market currencies at risk of depreciation
Since early October, emerging market currencies have been depreciating against the U.S. dollar. Differentials in growth, interest rates and expectations on policy changes by the Trump administration are all contributing to the decline. Whether the depreciation is taking place in economies that have ... READ MORE >
Morning market minute: Tariffs, supply chain pressures and inflation
One week from today, President-elect Donald Trump will be inaugurated, bringing a new round of import taxes on a series of goods across several economies. While the details are still unclear, it is not too early to begin estimating the deadweight that a new round of tariffs will place on economic ... READ MORE >
American exceptionalism: Job gains of 256,000 to temper calls for further rate cuts
American exceptionalism is the primary takeaway from one of the more remarkable years in labor market dynamics over the past half century as the economy generated 256,000 new jobs in December. That increase stands well above the 100,000 to 150,000 level that is necessary to keep employment ... READ MORE >
Morning market minute: Net immigration, population growth and U.S. employment
The U.S. December employment report will most likely show a net increase of 180,000 jobs with the risk of a stronger print because of seasonal fluctuations, a post-hurricane rebound in hiring as well as solid gains in government, health care, education, and leisure and hospitality, The unemployment is ... READ MORE >
Morning market minute: India’s rising capital buffer and the end of its currency peg
As India has gained prominence in the global economy, its central bank, the Reserve Bank of India, has wisely increased the level of foreign exchange holdings. These reserves are necessary to maintain payments for imports should there be a global economic financial crisis or a sudden devaluation of the ... READ MORE >