The consumer price index for January, which will be released this morning, will most likely reaffirm that service sector inflation remains sticky and stubborn amid strong job and wage gains that are the primary drivers of aggregate demand. While housing inflation is easing, owners’ equivalent rent ... READ MORE >
Joseph Brusuelas
Market minute: Foreign purchases of U.S. Treasury issuance
This week the federal government will issue $366 billion in debt, much of which will be purchased by foreign investors. The combination of growth and interest rate differentials, as well as rapidly changing fiscal and trade policies that favor a stronger dollar and the purchase of dollar-denominated ... READ MORE >
NIH adopts new policy for funding research
The National Institutes of Health's announcement that it would slash funding that covers overhead costs in research to a 15% maximum poses a grave risk to basic medical research in the United States. This policy, effective immediately, puts at risk public and private organizations engaged in pioneering ... READ MORE >
Job growth cools in January amid revisions to labor force estimate
The economic tailwind that has supported an average increase of 3.1% in household consumption since 2023 continued into January as robust demand for labor resulted in a 143,000 increase in total employment and an unemployment rate of 4%. The January jobs report, released on Friday, shows a resilient ... READ MORE >
Morning market minute: The rising concentration risk in equities
For the first time since the dot.com bust in 2001, the difference between the equity earnings yield on the forward-looking S&P 500 less the yield on the 10-year Treasury has declined into negative terrain. This is a function of the concentration in the largest technology names inside the S&P ... READ MORE >
Morning market minute: The divergent unemployment rates of foreign-born and native-born workers
On Friday, the Bureau of Labor Statistics will publish its jobs report for January. This month's report will take on added significance because it will include its annual benchmark revision and updated seasonal adjustment factors of the establishment survey, which includes nonfarm payrolls, employment, ... READ MORE >
Morning market minute: Trucking firms at risk amid trade tensions
As trade tensions have mounted in recent weeks, most of the focus has been on agriculture, autos and aviation, three industries that rely on integrated supply chains involving Mexico, Canada and China. Yet one area that should not be overlooked is trucking and transportation, which would take a hit ... READ MORE >
Morning market minute: Why productivity and workers hold the key to growth
To understand what is happening with interest rates and the global economy, we have made the case that nothing less than a regime change is taking place, characterized by scarce capital, insufficient aggregate supply, higher inflation and higher interest rates. Firms, as a result, will need to adjust ... READ MORE >
Morning market minute: Tariffs and the rising dollar
Investor expectations of a new round of tariffs have caused the U.S. dollar to mildly appreciate in recent months. Now, with steep tariffs on goods from Canada, Mexico and China set to begin Tuesday, one should expect the greenback to go even higher against major trading currencies. Such a move will ... READ MORE >
How an escalating trade war will affect global growth, inflation and employment
The United States has announced steep tariffs on goods made in Canada, Mexico and China starting on Tuesday. Even though Canada and Mexico have promised retaliation, we anticipate that the disputes with those two nations will be resolved in the near term, though the standoff with China will last ... READ MORE >