Abraham Lincoln once said that a house divided against itself cannot stand. That was true in 1858 and it’s true today when it comes to economic policy. The Trump administration’s strategic economic objective is to rebalance the global economy. That is, the Trump administration intends to reverse the ... READ MORE >
Joseph Brusuelas
Morning market minute: Bond market volatility and the Federal Reserve
The late-year selloff in the bond market has begun to look overextended. Recent trading pushed 10-year yields back down to 4.56% on Jan. 17 after reaching as high as 4.8%. The sudden shift in the market coincided with the growing sentiment that the Federal Reserve will cut the overnight policy rate by ... READ MORE >
To understand rising rates and volatility, look to regime change in global economy
Over the past three years, the core analytical framework we have used to understand the post-pandemic economy is that a fundamental structural shift, or regime change, is taking place. It's this shift that explains why long-term interest rates have been rising even as the Federal Reserve has ... READ MORE >
Morning market minute: The political economy of demographic growth
The American public expressed its preference for reduced immigration in electing President Trump to a second term. Yet underlying demographic realities show that those current policy preferences stand at cross-purposes with the needs of the U.S. economy. In a recent report, the Congressional ... READ MORE >
Morning market minute: Modeling the impact of tariffs
As firms and households await the expected increase in import taxes through a flurry of executive orders over the next several days, it is important to note just how challenging it will be to estimate their impact on growth, employment and inflation. Modeling such a shock to the economy depends upon ... READ MORE >
Morning market minute: How tariffs fall harder on lower-income households
Economic inequality in the United States has been a fact of life for decades. And the tariffs that President-elect Donald Trump is proposing will fall squarely on the shoulders of U.S. households, particularly those with lower incomes. Read RSM's global economic outlook in the latest issue of The ... READ MORE >
Morning market minute: Regime change and financial conditions
Regime change continues to be the foundation of our analytical framework for the post-pandemic economy. Secular stagnation that for years featured low inflation, low interest rates and plentiful capital has been replaced by competition for capital, higher inflation and higher interest rates. During ... READ MORE >
Morning market minute: The tax over policy uncertainty is rising
It’s no mystery that rising uncertainty over the new presidential administration’s policies is one of the major risks to financial markets and the economic outlook. Volatility across asset markets has been rising, and is poised to continue increasing, as investors adjust to changes in fiscal, trade and ... READ MORE >
Morning market minute: Emerging market currencies at risk of depreciation
Since early October, emerging market currencies have been depreciating against the U.S. dollar. Differentials in growth, interest rates and expectations on policy changes by the Trump administration are all contributing to the decline. Whether the depreciation is taking place in economies that have ... READ MORE >
Morning market minute: Tariffs, supply chain pressures and inflation
One week from today, President-elect Donald Trump will be inaugurated, bringing a new round of import taxes on a series of goods across several economies. While the details are still unclear, it is not too early to begin estimating the deadweight that a new round of tariffs will place on economic ... READ MORE >