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 >
Joseph Brusuelas
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 >
U.S. financial conditions update: A shift in structure and a new center of gravity
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 >
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 >