The RSM Brexit Stress index remained essentially unchanged falling from .74 standard deviations above neutral to .72 for the week ending March 29. The primary catalysts for the relatively unchanged score were narrowing corporate bond spreads, lower volatility of British Sterling in foreign exchange markets and improvement in the FTSE … … READ MORE >
Economics
RSM US Middle Market Business Index tumbles in Q1–Joe Brusuelas decodes the drop
Joe Brusuelas explains what’s behind the drop in the first quarter RSM US Middle Market Business Index and how middle market businesses can prepare for an uncertain economic outlook. … READ MORE >
Yield curve inverts, though recession not yet in sight
Last week the policy-sensitive U.S. 10-year—three-month Treasury spread inverted, meaning yields on the short-term three-month Treasury bill were higher than yields on the 10-year Treasury note (Figure 1). The brief inversion implied that investors were willing to pay more for three-month short-term Treasury bills against the risk of holding depreciating … … READ MORE >
RSM Brexit Stress Index rises on uncertain policy path of May government
The RSM Brexit Stress Index increased to 0.71 standard deviations above neutral from 0.55 one week ago, amid continued uncertainty regarding timing of Britain’s departure from the European Union. … READ MORE >
The March edition of The Real Economy is out now
In the March issue of The Real Economy, we assess the impact of Brexit on the UK economy with our new RSM Brexit Stress Index. In addition, we provide a first glimpse of new data from the upcoming RSM US Middle Market Business Index survey on cybersecurity, and our monthly outlook for real GDP. … READ MORE >
The Fed: Prudent, patient and setting up for a heavy policy lift
The Federal Reserve Open Market Committee on Wednesday signaled that it in all likelihood has ended its policy normalization campaign. The FOMC is attempting to engineer a soft landing for an economy that rapidly decelerated during the first quarter of the year amid global economic headwinds, volatility across asset space and policy risks associated with U.S. trade policy. … READ MORE >
The RSM Brexit Stress Index: Brexit’s impact on trade, wealth, business cycle and corporate profit
On Wednesday, UK Prime Minister Theresa May asked the European Union for an extension of Britain’s deadline to exit the trading bloc to June 30, three months beyond the original deadline, media reported. The Real Economy Blog is closely watching Brexit developments and their impact on the middle market. Check out RSM’s Brexit Stress Index, which measures Brexit’s impact on the British economy. … READ MORE >
Uncertainty tax: the catalyst for underperformance in Anglo-American economies
An “uncertainty tax” linked to the economic realities of Brexit developments in the U.K. and trade tensions in the United States is damping overall economic activity in both economies. These issues, which are strongly linked to the breakout of economic populism around the world, are creating conditions for slower growth and recession if the current protectionist actions are sustained. … READ MORE >
FOMC preview: Prudent pause and revising economic outlook downward
The dovish turn at the Federal Open Market Committee’s January meeting was predicated on an interesting juxtaposition: the committee telegraphed a prudent pause in its policy normalization campaign, while not substantially revising down its forward-looking economic outlook. … READ MORE >
Miles to go before I sleep: Brexit moves toward extend and pretend
The U.K. Parliament this week has moved toward our base case for the Brexit process, approaching a short-term extension that will result in a modified deal for Britain to exit the European Union some time before June 30. But getting there won’t be easy. … READ MORE >