Economic growth amid high interest rates depends on two major factors: rising productivity and growth in the labor supply. … READ MORE >
yield curve
The increased attractiveness of corporate bonds as the Fed cuts rates
We expect the Federal Reserve to cut its policy rate by 25 basis points at its meeting on Thursday to a range between 4.5% and 4.75%. … READ MORE >
U.S. financial conditions update: A shift in structure and a new center of gravity
The RSM US Financial Conditions Index turned positive in January and has centered at 0,25 standard deviations above zero since March, indicating the normal level of risk priced into financial securities. … READ MORE >
Rates outlook: As economy enters glide path, bond market hedges its bets
Even as the economy shows positive trends like slowing inflation and a healthy labor market, the bond market is showing anxiety. … READ MORE >
Interest rate outlook: Debt ceiling standoff raised the cost of doing business
The Treasury’s need to sell $1.1 trillion in debt along with a strong probability of another Federal Reserve rate hike or two will push interest rates higher, raising the cost of doing business. … READ MORE >
Rising uncertainty stimulating a flight to cash
With the U.S. two-year yield now exceeding 5% and the Federal Reserve’s repo facility offering a return of 4.5%, capital is flowing into short-term securities in search of safety and yield. … READ MORE >
U.S. financial markets in the new year
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. … READ MORE >
Interest rate update: Confidence in the Fed, but uncertainty over long-term growth
The Federal Reserve has started to normalize interest rates, lifting the short-term transaction cost off the zero bound. The result has been a 100-basis point increase in the yield on 10-year Treasury bonds. … READ MORE >
What is the yield curve telling us?
Fears of an imminent recession are somewhat overblown. A closer look at the different components of the yield curve reveals a nuanced picture of the economic outlook … READ MORE >
As global tensions rise, RSM US Financial Conditions Index deteriorates
Our composite RSM U.S. 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. … READ MORE >