The decomposition of bond yields rests on two factors: first, expectations, or the average of future short-term interest rates; and second, a term premium that reflects compensation demanded by investors to hold riskier long-term bonds. Given that expectations are anchored by Federal Reserve policy guidance, approximately 80% of the recent increase in yields on the U.S. 10-year Treasury can be attributed to the term premium, with only 20% credited to changing expectations of where short-term rates will be over the next 10 years. … READ MORE >
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Initial jobless claims fall to lowest level since April
Initial jobless claims fell unexpectedly to 211,000 for the last week of December, the Labor Department reported on Thursday. … READ MORE >
Identifying countries at risk as the U.S. dollar surges
This rise in the dollar will cause economic challenges around the world, with those in the emerging markets likely to face greater adjustment problems as they face a rising cost of external debt paid in dollars. … READ MORE >
Stubborn inflation not stopping the U.S. consumer from spending
Personal income increased by 0.3%, personal spending by 0.4% and real spending by 0.3% as households used robust gains in disposable income. … READ MORE >
Morning market minute: The strange logic of economic populism and government shutdowns
The prospect of a government shutdown and another unnecessary standoff in Congress over raising the nation’s debt ceiling are providing a lump of coal in Americans’ holiday stockings. … READ MORE >
5 things to know in life sciences: Week of Dec. 16, 2024
Manufacturing takes center stage in biopharma. This and more in this week’s life sciences update. … READ MORE >
The Fed is right: Strong GDP data points to fewer rate cuts
The latest estimate of gross domestic product in the third quarter came out stronger than expected, rising by 3.1% instead of 2.8%. … READ MORE >
Global economic outlook for 2025: Modest growth amid trade tensions
Global growth in 2025 will expand at a modest 2.5% pace as the sluggish recovery from the pandemic continues, according to our forecast. … READ MORE >
Fed cuts rates as it signals a prudent pause to assess policy uncertainty
The Federal Reserve reduced its policy rate by 25 basis points to a range between 4.25% and 4.5% at its meeting on Wednesday. … READ MORE >
Housing starts fall below estimates as permits rebound
The recent levels of starts and permits do not suggest enough future supply to meet the growing demand of American households to keep home prices under control. … READ MORE >