Financial markets have started the year facing a host of challenges, including the prospect of a stand-off over the debt ceiling in a divided Congress and the possibility of a recession later this year. At the same time, businesses are contending with higher costs associated with the ... READ MORE >
RSM US Financial Conditions Index
Did fiscal spending go too far? Assessing the global economy.
Fiscal responses by governments around the world during the pandemic were unprecedented. Many governments put forward anywhere between 20% and 30% of gross domestic product in spending to mitigate the impact of economic shutdowns. Now, after months of elevated inflation and surging interest rates, ... READ MORE >
Financial conditions update: Rising risks and tightening markets
Despite a strong bounce in U.S. financial markets following better-than-anticipated inflation data for October, financial conditions remain tight. The risk to the economic outlook has not abated after one month of encouraging consumer price index data. Central banks continue to increase the cost of ... READ MORE >
Monetary policy tightening, the bond market and the business cycle
Central banks in developed economies are contending with a series of shocks that have threatened price stability and, ultimately, economic growth. Now, these shocks, which include inflation, interest rate increases and energy market turmoil, are all showing up in fixed income markets. With consumer ... READ MORE >
RSM US Financial Conditions Index: Risk aversion returns
Financial conditions in the United States deteriorated again in May after a pause in late April. The recent selloff across equity markets is indicative of the policy shift at the Federal Reserve, which intends to tighten financial conditions to achieve price stability. While we continue to make the ... READ MORE >
RSM U.S. Financial Conditions Index: Pricing in the cost of uncertainty
The recent decline in financial conditions eased in recent weeks as the markets moved from pricing in the risk of holding assets at a moment of deepening geopolitical stress to one of resignation. In our estimation, the likelihood of a protracted conflict in Eastern Europe and higher oil prices as ... READ MORE >
FOMC preview: Powell caught in the crossfire
Next Wednesday’s meeting of the Federal Open Market Committee will result in the central bank hiking its policy rate by 25 basis points to a range of between 0.25% and 0.5%. And with risks linked to the war in Ukraine exploding, we do not expect the Federal Reserve to outline its tentative plans to ... READ MORE >
As global tensions rise, RSM US Financial Conditions Index deteriorates
Our composite RSM US Financial Conditions Index is falling, reaching nearly one standard deviation below zero as the situation in Ukraine continues to threaten trade and global financial stability. The negative trends in the equity, money and bond markets imply a reassessment of the economic recovery, ... READ MORE >
RSM US Financial Conditions Index shows ebbing confidence
The composite RSM US Financial Conditions Index opened Tuesday at 0.2 standard deviations below zero. Although not significantly different from normal levels of risk, the overall trend shows a loss of confidence and increased volatility, as would be expected at a moment of geopolitical ... READ MORE >
RSM US Financial Conditions Index tightens amid rising tensions
The RSM US Financial Conditions Index reached neutral at the end of last week and turned negative on Tuesday’s news that Russia would formalize its control of Russian-speaking parts of Ukraine. Risks to the world order, the balance of power in Europe and fears of another series of supply shocks that ... READ MORE >