Despite a surge in new cases of coronavirus infections in England, the RSM UK Financial Conditions Index remains 0.1 standard deviations above neutral as investors focus on what is expected to be a strong economic rebound this year. We expect growth to expand at 4.2% this year and 7% next year. … READ MORE >
FOMC preview: Addressing market rise in inflation expectations
The January meeting of the Federal Open Market Committee this week presents the central bank with an opportunity to reinforce its forward guidance, which is most likely not going to change for years. … READ MORE >
Inflation-adjusted interest rates, investment and the middle market
A confluence of events and policy shifts has coalesced into a unique opportunity for middle market firms to make long-term strategic investments in their firms. Interest rates, once adjusted for inflation, reside in negative terrain. … READ MORE >
First-time jobless claims remain elevated
Initial jobless claims declined to 900,000 for the week ending Jan. 16, down from 965,000 the week before but well above the pre-pandemic high established in 1982. … READ MORE >
CHART OF THE DAY: Major economies to bolster spending in 2021
Pandemic-induced fiscal operations and monetary accommodation have pushed nominal and real policy rates into negative terrain, while aid to offset lost jobs and income has soared into the trillions around the G-7 economies. … READ MORE >
Biden outlines next round of fiscal aid
President-elect Joe Biden put forward an ambitious $1.9 trillion fiscal aid plan to address the public health crisis, the damage caused to the economy by the pandemic and the rollout of a national vaccination program. … READ MORE >
CHART OF THE DAY: OPEC’s response to a drop in demand
The demand for gasoline dropped like a stone as Americans remained in their homes during the pandemic, and that drop in demand left OPEC in a quandary. … READ MORE >
Initial jobless claims: Long shadow of the pandemic hangs over labor market
Initial jobless claims surged by 965,000 for the week ending Jan. 9, which almost surely captures the 498,000 individuals in the leisure and hospitality sector who lost their jobs in December and the remarkable churn in the labor market amid lockdowns by state and local governments. … READ MORE >
Updating U.S. GDP forecast: Fiscal firepower to bolster growth
A confluence of recent events has set the stage for a significant increase in fiscal outlays this year that will boost growth in the American economy to 5.4% for the year, with risk to the upside. … READ MORE >
CHART OF THE DAY: Inflation poses little risk to the U.S. economic outlook
The inflation rate ticked up to 1.4% in December and the yield on 10-year Treasuries remained above 1% for the sixth straight day on Wednesday. These should be considered small victories in the normalization of the economy after a rough nine months of the pandemic. … READ MORE >