The Federal Reserve’s preferred measure of inflation continued to ease in May as the personal consumption expenditures Index remained unchanged on the month and rose by 2.6% from a year ago. The core PCE index, which excludes the more volatile food and energy components, advanced by 0.1% and increased ... READ MORE >
Joseph Brusuelas
RSM US Manufacturing Outlook Index: Malaise continues in June
The best that can be said about manufacturing activity in five regional Federal Reserve banks is that it has moved more or less sideways over the past three months. This lackluster performance is consistent with the global slowdown in economic activity that is a response to tight monetary policies and ... READ MORE >
The de-risking of world trade: Industrial policy in an era of changing political economy
The death knell of globalization and free trade has been sounded over the past several years as nations have imposed tariffs and embraced industrial policies to protect vital industries. For the past five decades, the economics of efficiency has dominated the trade and financial framework. The logic ... READ MORE >
U.S. harmonized index of consumer prices: A more accurate metric of disinflation?
Part of a central bank’s challenge in setting its policy rate lies in knowing which measure of inflation to follow. From the consumer price index to the personal consumption expenditures index, different measures of inflation can tell a different story. On Friday, investors and policymakers will ... READ MORE >
U.S. inflation expectations are well anchored as Fed nears decision
American inflation expectations remain remarkably well anchored given the price shock of the past two and a half years. Our preferred measure of inflation expectations—the Federal Reserve’s five-year forward, five-year breakeven rate and the five-year forward breakeven index—imply that professional ... READ MORE >
Global financial market evolution, the carry trade and India’s economic ascent
One of the most impressive changes to the global economy is the ascent of India and its growing role in international financial markets and the global economy. The size of its economy has doubled to $4 trillion over the past decade and it’s becoming a major player in the international economy. India ... READ MORE >
U.S. gas prices poised to decline by 10% ahead of July 4
Traditionally, gasoline prices in the United States peak just ahead of the July 4 holiday as consumers get ready to hit the road and vacation season begins. But this year is shaping up to be a different story. Because of supply conditions and easing demand, domestic gasoline prices peaked at $3.67 per ... READ MORE >
PCE inflation preview: From noise to norm, rate cuts are on the horizon
Following the release of the consumer price index and producer price index this week, we are now forecasting a 0.084% increase in the May personal consumption expenditures index, translating to a 2.6% increase on a year-over-year basis. This will appear in the forecast table as a 0.10% estimate. But we ... READ MORE >
FOMC holds rates steady but is divided on their direction
The Federal Open Market Committee kept its policy rate in a range between 5.25% and 5.5% at its meeting on Wednesday while signaling through its dot plot forecast of interest rates that the committee would support at least one 25 basis-point rate cut this year. But the committee was split on the ... READ MORE >
U.S. consumer price index cools in May as gas and transportation costs decline
A gradual cooling in inflation in May because of a 3.6% decline in gasoline prices, a 1.1% drop in transportation costs and 0.5% easing in the cost of new vehicles shows that the rise in inflation at the start of the year was more noise than signal. Overall, the consumer price index increased by 3.3% ... READ MORE >