The net worth of U.S. households in the first quarter increased by nearly $5 trillion, or 3.8%, from the previous quarter to a record of $136.9 trillion. On an annual basis, that gain was $25.5 trillion, or 22.9%. But not all households benefited equally. … READ MORE >
Federal Reserve
What’s behind the recent decline in 10-year Treasury yields
The yield on 10-year Treasury bonds has dropped nearly 25 basis points to below 1.5%, touching 1.42% overnight on June 11 from its recent peak of 1.74% on March 31. … READ MORE >
April personal income and spending: Consumers push forward as demand for services surges
Demand for services jumped 1.1% in April as mass vaccinations accelerated, almost surely foreshadowing the coming surge in service spending that will be one of the defining narratives of the economy through the rest of the year. … READ MORE >
CHART OF THE DAY: Manufacturing sentiment remains high as global supply chain constraints cap growth expectations
Surveys carried out by four of the six regional central banks reported elevated manufacturing conditions, though there was some slippage from the lofty levels of the previous month. … READ MORE >
Forecasting the dollar in a post-pandemic world
We expect that the value of the greenback will experience notable volatility with modest downward pressure, causing the dollar to decline in value against major trading currencies. … READ MORE >
Interest rate update: Recent increase shows progress on the path to normalization
The yield on 10-year Treasury bonds is approaching 1.7%, within 20 basis points of already low pre-pandemic rates. The move higher is in response to signs of an economic recovery and perceived risks around inflation. But sub-2% 10-year interest rates are far from what a healthy economy would support. … READ MORE >
Frothy markets and the risk to the economic outlook in the era of low interest rates
The Bloomberg U.S. Financial Conditions Plus Index has reached 2.9 standard deviations above neutral, an unprecedented level that signals the possibility of froth in asset markets. … READ MORE >
Fed policy decision: Steady as U.S. economy at inflection point
The Federal Reserve made no substantial changes on Wednesday to the path of interest rates, its monthly $120 billion in asset purchases, overnight interest rates or interest paid on excess reserves. … READ MORE >
CHART OF THE DAY: Output gap to close in current quarter, an extraordinary achievement
We are now fully confident that the American economy will move back above the pre-pandemic level of activity in the current quarter. Given the size of the shock to the real economy, and the depth and breadth of the crisis, this recovery is remarkable. … READ MORE >
Interest rate update: The changing yield landscape, in eight charts
The yield on 10-year Treasury bonds has moved to 1.55%, within 50 basis points of already low pre-pandemic rates. While anything near 1.60% is better than the 0.60% observed last year, we expect the yield to rise to 1.9% at the end of the year. … READ MORE >