With inflation easing and the labor market cooling, the Federal Reserve has signaled that it is poised to cut interest rates. But for how long, and what will the economy look like if the Fed follows through? Join RSM US Chief Economist Joe Brusuelas and U.S. Chamber of Commerce Executive Vice President ... READ MORE >
interest rates
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 >
Canada’s inflation fell to 2.5 per cent, solidifying case for rate cut
Canada’s consumer price index fell to 2.5 per cent in July, the lowest level since March 2021, solidifying the case for the Bank of Canada to cut its policy rate this month. The disinflation was broad-based and included components from food to recreation and, most notably, shelter. All measures of ... 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 >
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 >
Service sector bounces back in July, easing growth concerns
Few observers could have expected that the ISM service index would become the market’s savior this week, but that is what happened. The index rose to positive territory at 51.4 after dropping in June to 48.8, suggesting that some of the concerns over an imminent recession looked overblown. We remain ... READ MORE >
Notes on a classic market panic: Unwinding of the yen-based carry trade
The turmoil in global financial markets on Monday was long in coming but spurred by short-term pressures: the unwinding of the yen-based carry trade, where speculators and short-term investors borrow against the yen to purchase risk assets elsewhere. As these investors exited their positions in the ... READ MORE >
Productivity continues to climb as investments take hold
The rebound of labor productivity in the second quarter is another sign of why the economy will continue to be on strong footing despite growing concerns over a labor market slowdown. The second quarter’s labor productivity growth was 2.3%, the Labor Department reported on Thursday. Not only did the ... 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 >
Job openings exceed forecasts as layoffs and quits reach multiyear lows
Job openings continued to point to strong labor demand, staying above forecast at 8.18 million in June. May’s number was also revised up to 8.23 million, according to Bureau of Labor Statistics data released on Tuesday. The data supported our forecast of another strong month of job gains in July when ... READ MORE >