Sustained strength in wages continues to attract workers back into the American labor force which resulted in a net increase of 428,000 in April. … READ MORE >
Federal Reserve
Fed policy and the natural rate of interest—a delicate balancing act
The current estimate of the natural rate of interest is 0.5%, hardly enough to compensate for the risk of investment. … READ MORE >
FOMC decision: Policy, price stability and balance sheet strategy
The Federal Reserve on Wednesday showed that it intends to achieve price stability, maximum sustainable employment and long-term growth despite the risk of a higher unemployment and a hard landing of the economy. … READ MORE >
FOMC preview: Rate hikes and balance sheet reduction are up next
Next week’s Federal Open Market Committee meeting will kick off an extraordinary two months of policy decisions by the Federal Reserve in which we expect the central bank to hike its policy rate by 100 basis points. … READ MORE >
U.S. GDP declines by 1.4%: This is what an overheating economy looks like
Growth in the first three months of the year contracted at a 1.4% pace as Americans turned to imports to meet torrid demand that is simply unsustainable. … READ MORE >
Why the U.S. dollar is strengthening
Policy by the central bank, interest rate differentials and a risk haven move into U.S. dollar-denominated assets are driving up the dollar against major trading currencies. … READ MORE >
Interest rate update: Confidence in the Fed, but uncertainty over long-term growth
The Federal Reserve has started to normalize interest rates, lifting the short-term transaction cost off the zero bound. The result has been a 100-basis point increase in the yield on 10-year Treasury bonds. … READ MORE >
Inflation marches higher, hitting 8.5% compared to a year ago
Long ago and far away, it was once taught that inflation has long and variable lags. That still probably applies when setting policy, managing a portfolio or making longer-term investments as top-line inflation jumped by 1.2% in March to 8.5% on a year-ago basis, according to government data released Tuesday. … … READ MORE >
FOMC minutes: Fed prepares to shift its policy normalization into a higher gear
The Federal Reserve is preparing to launch the next phase of its policy normalization by drawing down its balance sheet as soon as May to boost rates out along the maturity spectrum. … READ MORE >
RSM U.S. Financial Conditions Index: Pricing in the cost of uncertainty
The RSM US Financial Conditions Index remains more than 0.2 standard deviations below normal. This is a indication that investors are requiring additional compensation for the risk of lending and the increased cost of investing in an environment of heightened uncertainty. … READ MORE >