The 32.9% decline in U.S. gross domestic product is the single largest decline in the report since the collection of the data began in 1947. But the reopening of the economy that begin around May 1 resulted in a far more muted decline that was tracking near 50% in April. … READ MORE >
First-time jobless claims rise for second straight week
First-time jobless claims increased by 1.434 million for the week ending July 25, the Labor Department reported on Thursday, while continuing claims increased by 17.01 million, implying an increase to an 11.6% insured unemployment rate. … READ MORE >
Assessing the bond market ahead of the coming change to Fed policy
The bond market is signaling that investors are preparing for an average inflation targeting regime, a quicker and more brisk pace of asset purchases or perhaps a yield curve cap out to the three-year maturity spectrum … READ MORE >
FOMC rate decision: Waiting on September
In keeping interest rates steady, the Federal Reserve on Wednesday underscored its ultra-cautious outlook and reiterated its view that the pandemic is the primary driving force within the economy. … READ MORE >
Rational business and investment planning during an irrational pandemic
If there were any remaining doubts that the pandemic was real or that it would suddenly disappear into the warm summer air, the recent headlines should have dispelled them. … READ MORE >
Managing expectations of dollar strength during and after the pandemic
The greenback has increased 3.89% this year using the Fed’s broad trade-weighted index as our benchmark. Because of growing risks around the domestic management of the pandemic and increasing uncertainty around U.S. fiscal policy, we think that strength is at risk. … READ MORE >
FOMC preview: Coming attractions at the Fed
The Federal Reserve’s rate decisions on July 29 will likely be remembered not for what is stated inside the policy communique. Rather, it will be long noted by what Fed Chairman Jerome Powell says at his news conference afterward regarding policy change. … READ MORE >
Initial jobless claims, by state: Texas passes 3 million
Texas became the fifth state to have processed 3 million initial filings for unemployment benefits since the onset of the novel coronavirus and the shutdown of local economies on March 7. … READ MORE >
Initial jobless claims: Slowing economy pushes claims higher
A series of alternative and near real-time data show that the economy began to slow on or around June 24. First-time jobless claims, which increased by 1.416 million for the week ending July 18, affirm the evolution of that data and point to risks around a slower pace of workers being recalled to their pre-pandemic jobs. … READ MORE >
Policy cliffs approaching as economy slows
While we anticipate that Congress will approve a fifth round of fiscal aid to support the economy as the pandemic intensifies, it is now clear that this aid will not be put in place in time to prevent an “air pocket” in the economy later this summer. … READ MORE >