Yields could very well rise in the near term with the 30-year Treasury note testing 5% and the 10-year approaching 4.5%. … READ MORE >
Federal Reserve
Inflation expectations surge as effective tariff rate hits 17.8%
The sharp increase, which comes as higher tariffs are about to take hold, heightens the risk that the Federal Reserve is losing control of what until recently were well-anchored expectations and, consequently, price stability. … READ MORE >
In April CPI report, scant evidence of tariff-induced inflation
We think it probable that the pervasive uncertainty around trade policy caused businesses to simply remain in place until they had more information about the tariffs. … READ MORE >
With trade truce, U.S. and China avoid a decoupling, but devil is in the details
The bottom line is that American firms can now prepare for a significant increase in the cost of imports, which will then be passed along to consumers. … READ MORE >
Fed maintains rates but signals risk of stagflation
The Federal Open Market Committee held its policy rate steady in a range between 4.25% and 4.5% on Wednesday. But the Fed updated its policy statement in which it highlighted the risk of stagflation. … READ MORE >
Market Minute: April was the cruelest month. Now, all eyes are on the Fed.
We expect the Federal Reserve to keep its policy rate in a range between 4.25% and 4.5% with little to no change in the policy statement when the Federal Open Market Committee meets on May 6 and 7. … READ MORE >
Last call on the current business cycle? U.S. added 177,000 jobs in April.
The labor market expanded at a solid pace in April, which should be taken as a positive given the price shock that will soon begin showing up. … READ MORE >
On the knife’s edge: U.S. GDP contracted by 0.3% in the first quarter
The American economy is navigating an air-pocket that has caused it to rapidly lose altitude. It has entered a period that is best characterized as stagflation and that will in the near term limit the degrees of freedom on policy at the Federal Reserve. … READ MORE >
Introducing the RSM US Recession Monitor
After significant disruption to trade policy and financial markets this year, we now forecast a 55% probability of a recession over the next 12 months. … READ MORE >
Market Minute: A word about central bank independence
Cutting the policy rate into conditions best described as stagflation would only intensify that movement, driving capital flows into euros, yen and francs while driving interest rates higher. … READ MORE >