The Federal Open Market Committee reduced the federal funds rate by 25 basis points on Wednesday to a range between 4.5% and 4.75%. Slowing inflation and strong productivity gains imply that the Fed has ample room to keep cutting rates next year. The major takeaway from the policy statement is ... READ MORE >
inflation
U.S. August CPI: Further signs of moderation as energy prices decline
Inflation inside the consumer price index continued to moderate in August as the top-line figure increased by 0.2% on the month and by 2.5% on a year-ago basis. Core inflation increased by 0.3% and 3.2%, respectively, on the back of a 1% decline in used cars and truck prices as well as an 0.8% drop in ... READ MORE >
Financial markets update: Front-running the Fed’s first cut, and our new call on rates
Investors expect the Federal Reserve to cut the federal funds rate and signal a series of further cuts through next year at its next meeting on Sept. 18. Those expectations have resulted in a notable decline in 10-year bond yields. By the second week of August, investors had pushed 10-year Treasury ... READ MORE >
Fed’s key inflation gauge shows price stability as consumers hit the accelerator
Disinflation, strong household consumption and incomes rising above the rate of inflation continue to be the defining narrative of the U.S. economy as it heads into the second half of the year. With the Federal Reserve’s preferred measure of inflation, the personal consumption expenditures index, ... READ MORE >
The TIPS bond market sees 2.1% inflation over the next 10 years
As inflation moves back toward the Federal Reserve’s 2% target, investors and firm managers will be looking at market-based measures of inflation expectations to make their decisions. Treasury Inflation-Protected Securities, or TIPS, are one of those measures used to make such ... READ MORE >
Seven reasons why the U.S. economy will not fall into recession
Market panics are a normal part of American business cycles. The recent scare, driven by a combination of slower hiring and the partial unwinding of the global carry trade, stands in contrast with resilient household spending, a fiscal tailwind and solid, if unspectacular, fixed business investment in the ... READ MORE >
US July CPI: Further moderation in inflation as Fed prepares policy pivot
Inflation continued to moderate in July as both top-line and core inflation increased 0.2%; top-line inflation increased 2.9% from one year ago and core inflation advanced 3.2%. The internals of the report released by the Bureau of Labor Statistics on Wednesday tend to suggest that there will be further ... READ MORE >
Producer prices grow slower than expected, adding evidence to support rate cut
A drop in July’s producer inflation suggests another month of favorable inflation data that should help seal the deal for a rate cut in September and more afterwards. The final demand inflation rose 0.1% in July and 2.2% from a year ago. Even better, the core component of the producer inflation number ... READ MORE >
Fed holds rates steady as it sets up for September cut
The Federal Open Market Committee kept its federal funds policy rate between a range of 5.25% and 5.5% at its meeting Wednesday while signaling that it is moving toward easing its restrictive policy rate. We expect that the FOMC will reduce the policy rate by 25 basis points at its September ... READ MORE >
PCE inflation continues to ease in June as income and spending gain
The Federal Reserve’s preferred measure of inflation continued to ease in June, reaffirming that the central bank has achieved enough price stability to reduce its policy rate at its September meeting, which has been our baseline forecast for a number of months. Top-line inflation in the personal ... READ MORE >