There are growing signs that inflation is retreating while the labor market remains healthy. Absent another shock, the Federal Reserve is likely to ease up on its rate increases as these dynamics take hold. Even a pause in rate hikes would most likely guide the economy toward a mild downturn rather ... READ MORE >
bond markets
Risk metrics: Monitoring distress in the U.S. financial sector
As this latest episode of banking distress makes clear, the health of the U.S. economy depends on the health of the financial sector. Even if a business seems far removed from Wall Street, trends in the financial markets have important implications on that company’s fiscal health and operations. U.S. ... READ MORE >
End of an era? Bond market selloff prompts a new regime
The dramatic fiscal and monetary response to the pandemic has elicited a structural break in globalization, growth and liquidity regimes that have driven the world's economies over the past 25 years. Gone is the hyper-globalization that was the primary driver of low inflation and low interest ... READ MORE >
RSM U.S. Financial Conditions Index: Pricing in the cost of uncertainty
The recent decline in financial conditions eased in recent weeks as the markets moved from pricing in the risk of holding assets at a moment of deepening geopolitical stress to one of resignation. In our estimation, the likelihood of a protracted conflict in Eastern Europe and higher oil prices as ... READ MORE >
Monitoring financial risk during pandemics
Global market participants have priced in the imminent reopening of the Chinese economy, while the World Health Organization has cautioned that it is too early to declare that the virus is at its peak. It is clear based on news flow over the weekend and into Monday's early-morning session that it ... READ MORE >