This week U.S. Treasury Secretary Steven Mnuchin told a group of Republican senators they need to act to prevent an increase in the unemployment rate to 20%. While some would say that is political hyperbole, it is not. Policymakers, investors and company managers will observe a jump in first-time jobless ... READ MORE >
Joe Brusuelas
Fed and Treasury create Commercial Paper Funding Facility to ease credit stress
The U.S. Treasury on Tuesday granted the Federal Reserve 13(3) authority under Dodd-Frank that permits the central bank to take steps under exigent and unusual circumstances to stabilize financial markets and the economy. The U.S. Treasury stepped forward with a $10 billion backstop to fund a ... READ MORE >
The RSM Brexit Stress Index shoots up, reflecting coronavirus supply shock concern
Following the U.K.’s departure from the European Union more than a month ago, markets are bracing for a global health crisis and the accompanying supply shock. The RSM Brexit Stress Index -- which measures financial and economic risk surrounding Britain’s departure from Europe’s common market – has shot ... READ MORE >
An improved outlook for manufacturing filtered by Boeing and the coronavirus
The RSM US Manufacturing Index implies improvement in national manufacturing sentiment in February, and we expect a similar uptick in the February ISM survey of manufacturing sentiment next month. However, February may be the last month before the coronavirus takes its toll on the global supply chain; at ... READ MORE >
Negative yields increase as global coronavirus risk proliferates
One of the major narratives inside the global fixed income market over the past year was the rise of negative-yielding debt, which peaked at $17 trillion during the most intense phase of the U.S.-China trade conflict in August 2019. As fears of a wider trade conflict abated, the issuance of global ... READ MORE >
As coronavirus spreads, what are the fiscal and monetary policy options?
Investors over the past few days have priced in three 25 basis-point cuts in the federal funds rate by the end of the year, with the first cut implied by the markets coming in June. This is somewhat misguided, given the nature of the global public health emergency that is the catalyst for the change in ... READ MORE >
U.S. GDP grew an estimated 1.5% in January; household consumption expected to be strongest segment in Q1
The United States’ gross domestic product grew an estimated 1.5% in January, according to RSM’s Monthly Index of Economic Activity. That bump followed GDP growth of 2.3% in the fourth quarter of 2019. We forecast a 1% GDP growth rate with downside risk for the first quarter of the year, with household ... READ MORE >
Economics of a global health crisis
Global economic markets' reaction to China’s coronavirus has been severe, resulting in a significant safe-haven move into U.S. government securities by international investors. Whether the virus has a lasting impact on the broader global economy depends largely on the ability of the world’s major ... READ MORE >
U.S. Q4’19 GDP: slow and steady
The U.S. growth picture on Thursday arrived spot on with the 2.1% economic consensus driven by solid but slowing personal consumption and strong government spending. The large drop in imports, along with the noticeable easing of spending in the fourth quarter, does denote some caution on the growth ... READ MORE >
RSM Brexit Stress Index eases as general election draws closer
Stress in the UK financial markets continued to ease as the general election draws closer. The RSM Brexit Stress Index, which measures financial and economic risk surrounding Britain’s impending departure from the European Union, closed the week at 0.29 standard deviations above normal levels of implied ... READ MORE >