Gains toward price stability remain elusive as the 1.5% increase in overall energy costs and stubborn housing inflation were the major drivers of inflation over the past month. … READ MORE >
Joseph Brusuelas
Excess savings are critical to the economic expansion’s duration
According to our analysis of revised BEA data, consumers are on a strong footing, with between $400 billion and $1.3 trillion in excess savings that they can draw upon as the economy moves back toward price stability. … READ MORE >
Oil price increase to exert limited impact following attack on Israel
Oil prices surged following the surprise attack by Hamas on Israel and Israel’s counterstrike over the weekend. After a knee-jerk reaction upon the open of trading around the world, prices have been well behaved and should abate as the shock of the attack, as deadly as it is, abates. It … … READ MORE >
The great rate reset: The end of easy money, rising yields and the onset of a new era
For the first time in years, the risk premium has been positive, which is an important signal that interest rates are indeed returning to normal. … READ MORE >
Chart of the Day: Falling oil and gas demand implies inflation relief
Falling wholesale gasoline prices imply a decline of 12% in retail gasoline prices in the coming weeks from its current level of $3.79 to roughly $3.34 per gallon. … READ MORE >
RSM US Manufacturing Outlook Index: Four months of improvements at risk
Three of the five regional Federal Reserve surveys reported increased activity during the month, while the Philadelphia and Kansas City regions reported significant contractions. … READ MORE >
The economics of another U.S. government shutdown
A shutdown will hurt the economy, placing a drag on spending and overall economic activity as we approach the traditional holiday season. … READ MORE >
Don’t believe the hype: Student loan payments present modest drag on growth
Despite the hype and scare tactics around a well-telegraphed restart date, we estimate that it will result in only a 0.3 percentage point drag on GDP in the United States. … READ MORE >
FOMC policy decision: No rate hike as Fed implies soft landing
The Fed maintained its policy rate in a range between 5.25% and 5.5% while revisions to its Summary of Economic Projections strongly imply that the central bank no longer expects a recession. … READ MORE >
R-star: The role of the natural rate of interest in monetary policy and economic growth
Known by economists as r-star, it has risen to a range between 1.75% and 2% in our estimation, a marked increase from the 0.5% that had prevailed over the previous 15 years. … READ MORE >