Monetary policy has reached a pivot point, bringing an increased probability for sustained growth and easing fears of a premature end to the business cycle. This improvement should underscore the positive outlook that will be featured in the Federal Open Market Committee’s Summary of Economic ... READ MORE >
Joseph Brusuelas
U.S. jobs report: Strong demand for labor continues its remarkable run in May
This economic commentary is dedicated to the memory of my friend the economics reporter Ben White. I shall miss talking economics, policy and baseball with him. Labor demand continues to increase at a remarkably strong pace, which removes the prospect of a July rate reduction and creates the sense that ... READ MORE >
FOMC preview: Dot plot to imply two rate cuts this year
We expect the Federal Open Market Committee to keep its policy rate unchanged between a rate of 5.25% and 5.5% at its meeting next week. But we anticipate that the median rate forecast implied by the dot plot will indicate that the committee now expects two rate cuts this year, for a cumulative rate ... READ MORE >
Global central bank policy pivot continues as ECB cuts rate
The European Central Bank reduced its policy rate by 25 basis points on Thursday which, following the 25 basis-point rate reduction by the Bank of Canada on Wednesday, represents the first in what we expect will be a series of rate cuts by the G7 central banks this year. The moves in Europe and Canada ... READ MORE >
RSM US Manufacturing Outlook Index: Decline continues in May
Manufacturing activity continues to lag improvements in the general economy. Surveys of manufacturing firms conducted by five regional Federal Reserve banks continue to show the negative impact of a tight monetary policy and the lagged effect of an aggressive fiscal policy. Manufacturing in ... READ MORE >
Global central bank outlook: Reducing rates to bolster growth
After two years of major central banks raising interest rates, the weighted global policy rate stands at a restrictive 7.2%. But with disinflation having taken hold around the world, it is time for central banks to reduce these rates. Usually, the Federal Reserve would lead the way. But with private ... READ MORE >
Assessing central bank policy in the post-pandemic economy
Following two of the largest economic shocks of recent history, global central banks are approaching a critical juncture. Stagnant global growth amid a structural economic shift demand a policy response by central banks still attempting to restore price stability. This makes decisions on when to ... READ MORE >
Interest rate volatility: Why Fed policy guidance is less effective
In less than a year, the 10-year yield has moved more than 350 basis points in both directions, a volatility not seen since the financial crisis. The MOVE Index, a measure of bond market volatility, has experienced what can politely be called excessive volatility since the Federal Reserve started ... READ MORE >
Intervening in foreign exchange markets: The poverty of dollar devaluation
The United States has become a magnet for global capital as investors flock to its resilient economy because of interest rate and growth differentials between the U.S. and its major trading partners and a structural budget deficit featuring robust spending on infrastructure, supply chain resilience and ... READ MORE >
GDP growth slows to 1.6% in first quarter, exaggerated by volatile trade and inventory data
Overall growth in U.S. gross domestic product fell to 1.6% in the first quarter, but the slowdown was exaggerated by volatile trade and inventory data, which provided a 1.2% drag on overall activity. Final sales to domestic purchasers, by contrast, which exclude inventories and trade, increased by ... READ MORE >