The Federal Reserve is looking to cut its policy rate three times this year, according to information inferred from the Summary of Economic Projections and policy statement released on Wednesday. The cuts would reduce the policy rate by 75 basis points, from the current range between 5.25% and 5.5% ... READ MORE >
Joseph Brusuelas
Should the U.S. ban imports of Chinese electric vehicles?
The Biden administration recently ordered an investigation into the national security threat posed by Chinese connected-vehicle technology. The outcome, if taken to an extreme, could result in a ban on the import of Chinese vehicles into the United States. But there is much more driving the ... READ MORE >
U.S. employment report: Robust hiring continued in February
Sustained demand for labor in the American economy was on vivid display on Friday as the Labor Department reported that 275,000 jobs were created in February. The Bureau of Labor Statistics revised down its initial estimate of the January jobs report from 353,000 jobs created to 229,000 and the ... READ MORE >
RSM US Manufacturing Outlook Index: Soft sentiment in an uneven recovery
The slowdown in manufacturing continued into February, but at a slower pace, according to surveys conducted by regional Federal Reserve banks. In fact, two of the five regions used in our analysis of regional manufacturing (Philadelphia and Dallas) reported overall positive responses. Three regions ... READ MORE >
How real is the wealth effect in a bull market?
Despite what you might read or hear, the stock market is not the economy. But that does not mean you should ignore the effect that the stock market has on household income and spending, the labor market, overall financial conditions and economic growth. A 2021 paper in the American Economic Review ... READ MORE >
What would Keynes do? Russian assets and funding the war in Ukraine
August 1914: a global financial crisis caused by the outbreak of World War I resulted in the Bank of England’s losing two-thirds of its gold reserves in less than a week, placing at risk London’s pre-eminence as the center of global finance. To prevent a financial collapse, the U.K. government ... READ MORE >
Natural gas and the move toward energy self-sufficiency
The major move toward energy self-sufficiency in the United States and in Europe in recent years has been the development of the U.S. natural gas industry and the export of liquefied natural gas to our allies. Natural gas accounts for roughly 30% of the energy used domestically, and the U.S. is now ... READ MORE >
Solow Residual: Total factor productivity and the U.S. economy
For decades, the productivity of American workers seemed stuck. No matter how hard people worked, or how much was invested, productivity, except for a few years, never seemed to move much. That may be changing. Last year, American productivity improved by 2.7%, and gained steam in the second half ... READ MORE >
Geopolitical tensions and risks to the inflation outlook
Just as inflation appeared to be coming under control in recent months, rising tensions in the Middle East have shaken this view and now represent the major risk to our economic and inflation outlooks. The focus of this new uncertainty centers on the energy markets, which have been roiled by ... READ MORE >
Inflation expectations remain remarkably well anchored
The inflation shock of the past three years is abating. One reason is that expectations of inflation continue to remain remarkably well anchored. The Federal Reserve’s five-year inflation forward breakeven rate-—a closely watched measure of pricing expectations—stands at 2.3%, which is below the ... READ MORE >