As the Federal Reserve struggles to tame inflation, the central bank is raising interest rates and tightening financial conditions in what we think is a regime change that will increase the cost of both public and private debt and curb growth. We expect the Fed to raise its policy rate above 5% in ... READ MORE >
interest rates
Consumer sentiment falls as outlook worsens
The University of Michigan's consumer sentiment index declined by a sharp 5.2 points to 54.7 in the first half of November, slightly above the all-time low in June at 50, according to survey data released Friday. Both sentiment over current conditions and future expectations deteriorated significantly, ... READ MORE >
When will inflation slow? Pay attention to housing.
A correction in the housing market as mortgage rates reach 20-year highs is underway. While overall price growth has cooled, though, the housing components inside the two inflation reports—the Consumer Price Index and the Personal Consumption Expenditures price index—have shown no signs of ... READ MORE >
Uncertainty, policy choices and the prospects for middle market investment
Stubbornly high inflation and rising interest rates are creating a pervasive sense of uncertainty among business owners and investors that has left policymakers with few good options. But with the right targeted measures that encourage businesses to make productivity-enhancing investments, ... READ MORE >
Canada adds a stunning 108,000 jobs in October, reversing decline of prior 5 months
In a stunning turnaround, Canada added 108,000 jobs in October, reversing all the losses from May to September. The outsize gain and the resilience of the job market suggest that the Bank of Canada will announce another supersize interest rate hike next month. Wages increased by a robust 5.6% and ... READ MORE >
Fed raises its policy rate by 75 basis points as it prepares to slow pace of hikes
The Federal Reserve increased its policy rate by 75 basis points on Wednesday to a range between 3.75% and 4% as it hinted at slowing the pace of its hikes while it assesses the impact of past increases. We expect at least a 50-basis-point hike in December, another 50-point hike in January and then ... READ MORE >
Job openings and manufacturing production grow more than expected
Job openings came in hotter than expected in September, suggesting that the imbalance in the labor market will take longer to resolve than originally anticipated. There were 1.9 job vacancies for each unemployed worker, near a record high, according to data from the Labor Department released ... READ MORE >
U.S. new home sales fell 10.9% in September
New home sales dropped 10.9% to 603,000 in September from August, continuing the downtrend since a recent high in late 2020, according to data from the Census Bureau. Since the start of the year, U.S. sales have dropped more than 28% in total as housing demand has slumped. The steep rise in mortgage ... READ MORE >
Bank of Canada announces smaller-than-expected 50-basis-point hike
The Bank of Canada on Wednesday dialed back the pace of rate hikes, announcing a 50-basis-point hike and bringing the policy rate to 3.75%. This marks a 3.5% increase in just eight months, since the first rate hike in March. This smaller-than-expected rate hike comes as recession fears increase, and ... READ MORE >
As turmoil grows, foreign banks and investors flock to the dollar
Intensifying financial stress and increased volatility have shaken global markets and stimulated a move of capital into the safety of the American dollar. Whether it is the purchase of short-term Treasury notes, the depositing of cash in U.S. financial institutions or a greater use of the Federal ... READ MORE >