Monetary policy is difficult under the best of circumstances. The cross currents of the trade war, a modest exogenous supply shock in oil markets, political pressure from the executive branch to reduce interest rates are among the factors that make the upcoming FOMC meeting one of the more challenging policy decisions in some time. … READ MORE >
Joe Brusuelas
The RSM Brexit Stress Index: Reacting to a Parliamentary dose of recession prevention
The RSM Brexit Stress Index surged sharply during the week amid attempts by Boris Johnson, the Conservative Party prime minister, to curtail objections to a no-deal Brexit but eased at week’s end as Parliament regained control of government. … READ MORE >
August hiring slows: Jobs report shows unflattering shape of things to come
August hiring slowed to 130,000 jobs, reflecting late-cycle business dynamics and the impact of the trade war that is now spilling over into the real economy. After adjusting for Census Bureau hiring the top-line hiring increase was only 105,000 jobs, just above the 100,000 necessary to stabilize the unemployment rate … READ MORE >
US August employment preview: focus on goods producing and manufacturing jobs
Investor attention will be squarely focused on the pace of hiring in goods production and manufacturing in the August U.S. employment report released on Friday. The results will follow a decline in the August ISM manufacturing employment sub-index to 47.4, which implies contraction in hiring across those sectors. … READ MORE >
RSM Brexit Stress Index posts highest level since June 2016 referendum
The RSM Brexit Stress Index reached its highest level since the U.K.’s June 2016 referendum to leave the European Union, closing at 1.93, up 8 points on Tuesday from 1.85 a week earlier, amid instability in the U.K. government. … READ MORE >
RSM Brexit Stress Index surges on likelihood of “no deal” Brexit
The RSM Brexit Stress Index rose to record highs on Wednesday, following news that the government of Prime Minister Boris Johnson had received the okay to suspend Parliament just weeks ahead of a deadline for the U.K. to chart its path for withdrawal from the European Union. … READ MORE >
RSM Brexit Stress Index: Factoring in longer-term issues
The RSM Brexit Stress Index ended higher again this week on increased volatility. The composite index, which measures economic stress surrounding Britain’s impending departure from the European Union, closed at 1.74 on Friday from 1.64 a week ago. … READ MORE >
US data deluge: cold cup of coffee on a sunny summer day
This morning’s data deluge provided a perfect snapshot of the U.S. economy at the current time. A robust consumer, driven by strong real compensation in the first quarter of the year, continued to prop up the American economy, even as the domestic manufacturing sector contracted by 0.5% on a year-ago basis. … READ MORE >
Real negative yields signal business cycle nearing an end
The increasing probability that the U.S.-China trade and financial war will be a permanent feature of the global economic landscape is the catalyst for the inversion of the two-year-10-year Treasury yield curve on Wednesday. This inversion of that portion of the curve is the first since June 2007, which marked the start of the Great Recession. … READ MORE >
Trade war takes dangerous turn toward currency wars: What could happen next?
Chinese fiscal and monetary authorities permitted the yuan early this week to slip below the important psychological level of 7 to the dollar for the first time since 2008. It was a retaliatory measure by China against President Trump’s threat to impose an additional 10% tariff on $300 billion in Chinese exports, beginning Sept. 1. The Chinese government also ordered a halt to all purchases of U.S. crops. … READ MORE >