Reductions or increases in U.S. Federal Reserve’s policy rate are often like trying to kill a mosquito with an anvil; they may get the job done but the fallout is always widespread and sure to cause a commotion. So it is with today’s rate cut as the Federal Reserve Open Market Committee sought to provide a cushion to a rapidly deteriorating global economic environment that will likely spill over into the U.S. economy and muted inflation. … READ MORE >
Joe Brusuelas
FOMC Preview: Insurance against a greater pace of economic deceleration
A sagging global economy dragged down by a trade war and a domestic manufacturing sector on the edge of contraction are sufficient risks to warrant a 25-basis-point-reduction in the federal funds rate to 2% to 2.25% percent when the Federal Open Market Committee concludes its policy meeting on Wednesday. … READ MORE >
The RSM Brexit Stress Index: Increased volatility and higher stress as pro-Brexit PM takes Britain’s helm
The RSM Brexit Stress Index moved higher this week on increased currency market volatility and sobering economic news from the UK’s trading partners as Boris Johnson, the pro-Brexit Conservative Party candidate, was elected prime minister. … READ MORE >
Central banks brace for economic slowdown as manufacturing reflects contraction
As global central banks, including the U.S. Federal Reserve, prepare to proactively stave off an economic slowdown, we turn our attention to the primary rationale behind the push to alter monetary policy–the global economic downturn in manufacturing and its ripple effect on middle market suppliers. … READ MORE >
The RSM Brexit Stress Index: Adding to the list of unintended consequences
The RSM Brexit Stress Index moved higher again this week, as the market processed conflicting central banking trends: global equities pushed higher on an expected U.S. rate cut by the Federal Reserve and a quick turnaround in the U.K. bond market as the slim probability of a base rate cut by the Bank of England grew even smaller. … READ MORE >
The RSM Brexit Stress Index: Lower highs and lower lows
The RSM Brexit Stress Index closed slightly higher this week, as political talk centers on whether Boris Johnson, the Conservative Party front runner favored to take over as U.K. Prime Minister, can make good on his promise of removing Britain from the European Union with or without a deal. … READ MORE >
Calculating the likelihood of recession–RSM partners with UCLA Anderson Forecast
RSM recently entered into a strategic partnership with the UCLA Anderson Forecast, a longstanding and well-respected barometer of the economies of California and the United States issued by UCLA Anderson School of Management, based on GDP data and other economic indicators. … READ MORE >
The RSM Brexit Stress Index: A respite, but for how long?
The RSM Brexit Stress Index closed lower for the third week in a row, as the British economy contends with an uncertain political future nearly a month after Prime Minister Theresa May’s announced resignation. The composite index—which measures economic stress surrounding Britain’s pending departure from the European Union—moderated to 0.23 on Friday from 0.24 a week earlier. … READ MORE >
Wage growth and the end of business cycles
“It’s likely that wage growth has peaked in the current business cycle,” writes RSM Chief Economist Joe Brusuelas, “which strongly suggests that the U.S. economy has entered the latter stages of the economic expansion.” … READ MORE >
FOMC preview: Fed positions for rate cut later this year
The Federal Reserve is on the precipice of a major shift in policy as the economy, hiring and wages slow amid a backdrop of muted inflation. … READ MORE >