After nearly two years of extreme accommodation in the financial markets, the RSM US Financial Conditions index stands at 0.96 standard deviations above neutral—a decline from the elevated levels during the pandemic and a sign that markets are starting to price in more risk. The index’s more modest ... READ MORE >
monetary policy
U.S. Consumer Price Index: Inflation broadens out as shelter costs rise by 4.8%
November inflation data, rising by 6.8% on the year, offered no relief for American households as energy and transportation costs continued to drive prices higher. While there is some relief over the horizon on both fronts—falling oil and gasoline prices, as well as the return of North American ... READ MORE >
Bank of Canada decision: Central bankers set the stage for 2022 rate hikes
The Bank of Canada kept its policy rate at 0.25% at its December meeting on Wednesday as it prepares the public and market participants for the normalization of monetary policy and the first increase in interest rates next year. The central bank’s policy rate decision and forecast, on the back of a ... READ MORE >
Powell reappointed to lead the Fed, with Brainard elevated to vice chairwoman
The Biden administration’s widely expected reappointment of Jerome Powell as chairman of the Federal Reserve on Monday is a strong step toward providing stability and clarity for financial markets at a time when the central bank is under pressure to accelerate efforts to address inflation. In our ... READ MORE >
RSM US Financial Conditions Index: Setting the stage for sustained growth
Manufacturers are expecting increased activity in the coming months, surveys by the regional Federal Reserve banks suggest. But perhaps more important in terms of productivity and global competitiveness, those manufacturers say they plan to increase capital expenditures and spending on ... READ MORE >
Looking ahead to 2022 and what to expect in the economy
Nearly two years into the pandemic, there are signs that the worst of a once-in-a-century shock to the global economy is beginning to fade. As the economy approaches a full reopening, we expect growth in 2022 will exceed 4%, the unemployment rate will fall to 3.5% and job growth will average ... READ MORE >
Fed slows asset purchases as it moves to end pandemic-era accommodation
The Federal Reserve announced on Wednesday that later this month it would start paring back its pandemic-era monetary accommodation even as it held its policy rate between zero and 25 basis points. This policy step, announced after the two-day meeting of the Federal Open Market Committee, creates ... READ MORE >
RSM Canada Financial Conditions Index: An inflation tantrum?
Financial markets around the world are reacting to the rising risk of inflation and the prospect of policy responses by central banks, all of which have led to a modest easing in our RSM Canada Financial Conditions Index. The Bank of Canada has already halted its bond purchase plan, the Reserve ... READ MORE >
FOMC preview: Tapering explained
Next week’s meeting of the Federal Open Market Committee will focus on the Federal Reserve’s exit from its pandemic-era asset purchase program that has sent its balance sheet above $8.5 trillion. We expect that the Fed will announce plans to reduce its monthly monetary accommodation of $140 billion ... READ MORE >
Bank of Canada talks like a hawk and walks like a dove as it keeps rates steady
The emerging trend of central banks talking like hawks and walking like doves amid supply chain disruptions and persistent inflation continued as the Bank of Canada kept its policy rate at 0.25% on Wednesday. The central bank signaled that it intends to end its quantitative easing program and move ... READ MORE >