As inflation moves back toward the Federal Reserve’s 2% target, investors and firm managers will be looking at market-based measures of inflation expectations to make their decisions. Treasury Inflation-Protected Securities, or TIPS, are one of those measures used to make such ... READ MORE >
Seven reasons why the U.S. economy will not fall into recession
Market panics are a normal part of American business cycles. The recent scare, driven by a combination of slower hiring and the partial unwinding of the global carry trade, stands in contrast with resilient household spending, a fiscal tailwind and solid, if unspectacular, fixed business investment in the ... READ MORE >
US July CPI: Further moderation in inflation as Fed prepares policy pivot
Inflation continued to moderate in July as both top-line and core inflation increased 0.2%; top-line inflation increased 2.9% from one year ago and core inflation advanced 3.2%. The internals of the report released by the Bureau of Labor Statistics on Wednesday tend to suggest that there will be further ... READ MORE >
Notes on a classic market panic: Unwinding of the yen-based carry trade
The turmoil in global financial markets on Monday was long in coming but spurred by short-term pressures: the unwinding of the yen-based carry trade, where speculators and short-term investors borrow against the yen to purchase risk assets elsewhere. As these investors exited their positions in the ... READ MORE >
Job creation slows in July as unemployment increases to 4.3%
U.S. job growth slowed at an accelerated pace in July as 114,000 jobs were added and the unemployment rate increased to 4.3%. The higher jobless rate was driven by the addition of 420,000 people who entered the workforce looking to capture rising wages. Average hourly earnings increased by 0.2% ... READ MORE >
Fed holds rates steady as it sets up for September cut
The Federal Open Market Committee kept its federal funds policy rate between a range of 5.25% and 5.5% at its meeting Wednesday while signaling that it is moving toward easing its restrictive policy rate. We expect that the FOMC will reduce the policy rate by 25 basis points at its September ... READ MORE >
U.S. July employment report to show a gain of 200,000 jobs
Our provisional forecast for the July jobs report when it is released on Friday implies a net increase in total employment of 200,000 jobs with an easing in the unemployment rate from 4.1% to 4%. In addition, we forecast a 0.3% increase in average hourly earnings, which should translate to a 3.7% ... READ MORE >
PCE inflation continues to ease in June as income and spending gain
The Federal Reserve’s preferred measure of inflation continued to ease in June, reaffirming that the central bank has achieved enough price stability to reduce its policy rate at its September meeting, which has been our baseline forecast for a number of months. Top-line inflation in the personal ... READ MORE >
American economy grew by 2.8% in second quarter, exceeding forecasts
The U.S. economy advanced at a 2.8% pace in the second quarter, exceeding RSM’s forecast of 2.4%, and was up by 3.1% on a year-ago basis. For the first half of the year, average growth was 2.1%, which should put to rest any arguments that the economy is about to fall off a cliff. Perhaps more ... READ MORE >
GDP preview: U.S. top-line growth to show solid increase
We expect a 2.4% pace of growth with modest downside risk to our forecast when gross domestic product for the second quarter is released on Thursday. The two main swing factors are inventories, which should be quite strong and are likely to make overall top-line economic activity appear stronger than ... READ MORE >