The Bloomberg U.S. Financial Conditions Index Plus has risen in recent weeks, surpassing an unprecedented three standard deviations above normal levels and signaling an extraordinary level of risk-taking in the financial markets. This risk augurs an increase in regulatory activity, especially when it ... READ MORE >
Joseph Brusuelas
Forecasting the dollar in a post-pandemic world
The probability of the economy and financial markets returning to their pre-pandemic state is quite low. Nowhere is this more evident than in trying to estimate valuations of the U.S. dollar. Despite the robust rebound in consumer demand, a sluggish external sector and pandemic-induced economic ... READ MORE >
CHART OF THE DAY: Gasoline prices likely to ease as driving season kicks off
The Memorial Day weekend kicks off the summer driving season, and for many people who have avoided public gatherings during the pandemic, it is a welcome chance to take a trip. Those who take to the roads will likely receive a dividend in the coming days and weeks after seeing retail gasoline prices ... READ MORE >
The difference between noise and signal in U.S. wage growth
The pandemic and the economic shutdown it prompted have injected an inordinate amount of noise into the economic data, making policy judgments—which are always difficult—far more challenging. With those challenges, the risk of large errors that carry significant ramifications for the economy is ... READ MORE >
CHART OF THE DAY: First-time jobless claims continue to decline
First-time jobless claims continued their downward march for the week ending May 15, falling to 444,000 as new filings for federal Pandemic Unemployment Assistance declined to 95,086, down from 103,678 for the week ending May 8. There were 3.75 million continuing claims for the week ending May ... READ MORE >
CHART OF THE DAY: The logistics of a recovery
The Port of Los Angeles continued processing record numbers of shipping containers in April, including empties necessary for maintaining the Asian supply chain. The seaport said it was now processing vessels at a rate of 16 per day as opposed to the 10 per day it processed before this latest surge, ... READ MORE >
CHART OF THE DAY: Remittances to Mexico reach record levels
Worker remittances to their families in Mexico reached an all-time high in March, totaling $4.15 billion, according to Banco de Mexico. Remittances—which are funds sent home by workers in other countries—had been increasing along with the decade-long U.S. economic recovery from the global financial crisis ... READ MORE >
CHART OF THE DAY: Unemployment insurance claims continue to fall
First-time claims for unemployment insurance benefits continue to move in the right direction, falling during the week ending May 8 to 473,000, or a drop of 34,000 in seasonally adjusted terms, according to government data released Thursday. Over the past 13 weeks, initial claims have dropped in ... READ MORE >
Interest rate update: Recent increase shows progress on the path to normalization
The yield on 10-year Treasury bonds is approaching 1.7%, within 20 basis points of already low pre-pandemic rates. The recent increase in the 10-year is in response to signs of an economic recovery and perceived risks around higher inflation. But sub-2% interest rates on the 10-year Treasury are far ... READ MORE >
CHART OF THE DAY: A do-over year for the Consumer Price Index
The inflation numbers for April released on Wednesday show the Consumer Price Index rising by 4.2% compared to April 2020, higher than the Bloomberg consensus forecast of 3.6%. The core CPI, which excludes the volatile food and energy components, rose 3.0%, up from the 1.6% year-over-year rate of ... READ MORE >