The Federal Reserve maintained its policy rate in a range between 5.25% and 5.5% on Wednesday while revisions to its Summary of Economic Projections strongly imply that the central bank no longer expects a recession, which it did just six months ago, and is increasingly confident of a soft landing in the ... READ MORE >
Federal Reserve
Low core inflation should keep the Fed from hiking rates
While we expect the Federal Reserve to hold rates unchanged on Wednesday, what its updated Summary of Economic Projections will look like remains less clear. More likely than not, given the recent robust economic data, we might see higher growth and inflation reflected in the summary along with an ... READ MORE >
R-star: The role of the natural rate of interest in monetary policy and economic growth
The pandemic has spurred profound changes in the global economy like a tight labor market and elevated inflation that policymakers are only beginning to understand. But one result is clear: The days of historically low interest rates are over. Now, policymakers are wrestling with the question of ... READ MORE >
Industrial production nears a record high as consumer sentiment falls
Industrial volume in August rose by 0.4% to the highest level in 11 months, nearing the record registered last September. The increase was stronger than expected, reflecting a boost from machinery production and mining, which increased by 2% and 1.4%, respectively. Those categories account for more ... READ MORE >
August retail sales and producer inflation show a hot summer finish
The U.S. economy ran hotter than expected in August even as the momentum in spending slowed down. Retail sales and producer inflation came in significantly higher than forecast, while initial jobless claims were lower than the market consensus. But the downward revisions to retail sales in the prior ... READ MORE >
Energy pushes inflation higher but core prices remain grounded
Consumer inflation in August posted the biggest monthly increase in more than a year, driven mostly by the surge in oil and energy prices, the Bureau of Labor Statistics reported on Wednesday. But core inflation—which has more policy implications—grew slightly faster at 0.3% or 2.8% on a ... READ MORE >
Why the Fed should lift its 2% inflation target
We think that the Federal Reserve’s current cycle of rate hikes has peaked at a range between 5.25% and 5.5%. While inflation stands well above the Fed’s official 2% target, we think that because of the economic and political shocks since the pandemic, the Fed will raise its inflation target in the ... READ MORE >
Initial jobless claims fall to lowest level in seven months
Initial jobless claims dropped to 216,000 last week, the fewest since February, as the labor market remained tight, according to data from the Bureau of Labor Statistics. New claims remained far below the threshold of 250,000 that we see as signaling a recession, raising the chance that the cooling ... READ MORE >
Financial conditions and the cost of doing business: A webinar from RSM US and the U.S. Chamber of Commerce
Rising interest rates have taken a toll on the middle market businesses that make up America's real economy. Yet demand for labor remains strong, consumers continue to spend and inflation is easing. How to make sense of the cross-currents in America's real economy? Join RSM Chief Economist Joe ... READ MORE >
U.S. August jobs report: Labor market continues to cool
Cooler air permeating the nights as summer comes to an end is a perfect metaphor for an American labor market easing from the historically tight conditions of the past few years. In August, the U.S. economy added 187,000 jobs and the unemployment rate settled in at 3.8%, according to Labor Department ... READ MORE >