Are workers finally getting more productive?
Non-farm business productivity grew at an annualized 0.3 per cent in the first quarter, while unit labour costs rose at 4.7 per cent.
Economy
The Fed slows its balance-sheet shrinking
The Federal Reserve said at its May meeting that it will slow its quantitative tightening (QT) programme from June.
Slow growth, sticky prices: a whiff of stagflation
US GDP grew at an annualized 1.6 per cent in the first quarter, well below forecasts, while the core PCE price index rose at an annualized 3.7 per cent.
The market gives up on rate cuts
Bond investors started the year pricing six Federal Reserve rate cuts. They have now priced out almost all of them.
Three hot months: what the data now says
January's hot inflation reading could be put down to seasonal quirks. March's cannot.
Powell admits cuts will take longer
Jerome Powell conceded on 16 April that persistent inflation will delay interest rate cuts, something the bond market had been pricing for weeks.
Immigration changes the jobs maths
Non-farm payrolls rose by 303,000 in March and unemployment dipped to 3.8 per cent.
Inflation's stall isn't a seasonal fluke
For the first months of 2024, commentators blamed sticky inflation on leftover January seasonal effects and quirks in contract resets.
The Fed nudges its long-run rate higher
The Federal Open Market Committee left its policy rate at 5.25–5.50 per cent in March.
The Fed's banking lifeline expires
The Federal Reserve stopped making new loans under its Bank Term Funding Program (BTFP) on 11 March, closing the emergency facility it opened during the regional banking panic of 2023.
Why job numbers keep getting revised down
February’s payroll report showed a gain of 275,000 jobs, alongside a 167,000 downward revision to the previous two months.
The new normal for interest rates is higher
The Federal Reserve’s Summary of Economic Projections has started to back away from the idea of secular stagnation.
Japan and Britain slip into recession
Japan and Britain both slipped into technical recession in late 2023, according to fourth-quarter national accounts.
A hot inflation report hits short-term bonds
Headline inflation came in at 3.1 per cent in January and core prices rose by an uncomfortably hot 0.4 per cent on the month.
Special Report
Lunar New Year: China's stock market can't escape falling prices
Chinese consumer prices fell 0.8 per cent in January from a year earlier, the steepest drop in fifteen years, and the country's stock markets enter the Year of the Dragon with little to celebrate.
Did inflation's progress survive the revisions?
On 9 February the Bureau of Labor Statistics published its annual benchmark revisions to the consumer price index, and bond traders watched nervously.
353,000 jobs and no March cut
Non-farm payrolls rose by 353,000 in January, far above forecasts, and December's figure was revised sharply higher.
3.3% growth: too good to be true?
The US economy grew at an annualised rate of 3.3 per cent in the fourth quarter, ending 2023 well ahead of forecasts that had it slowing.
Banks borrow from the Fed to earn more from the Fed
Banks found a profitable arbitrage in an obscure corner of the Federal Reserve's plumbing.
Why January inflation always looks bad
Markets have a bad habit of overreacting to January inflation figures. January consumer price data have tended to surprise on the upside, and each time bond desks panic for a while.
The Fed's money drain is about to get real
The Federal Reserve's quantitative tightening (QT) programme has taken nearly $1 trillion of government and mortgage debt off its books without upsetting the financial plumbing.
Special Report
New Year: Markets want six rate cuts. They'll be disappointed
Forward markets start 2024 pricing in six quarter-point rate cuts, the first as early as March.
2023: The recession that never came
Twelve months ago almost every forecaster expected a US recession in 2023. Surveys in late 2022 put the probability at sixty-five per cent, an unusually high figure for a consensus view.
Red Sea attacks threaten cheaper goods
Maersk and other big shipping lines have paused transits through the Red Sea after Houthi missile and drone strikes on merchant ships in the Bab el-Mandeb strait.
The Fed pivots
Jerome Powell completed his change of tune at the December FOMC meeting and handed markets an early Christmas present.
Can the Fed really cut six times?
Fed funds futures are pricing in as many as six 25-basis-point cuts in 2024, which would take the policy rate from 5.4 per cent to below 4.0 per cent.
Inflation is already at target, if you squint
The October core Personal Consumption Expenditures (PCE) price index rose 3.5 per cent from a year earlier, still uncomfortably above the Fed's statutory goal.
A Fed hawk hints at cuts
Bond yields tumbled after Christopher Waller, one of the Federal Reserve's most influential and hawkish governors, said the central bank could start lowering rates if disinflation carried on for several more months.
Special Report
Cyber Monday: Record spending on borrowed money
American shoppers spent $12.4 billion online on Cyber Monday, a record for a single day.
Inflation hits 3.2%. The last mile begins
Headline inflation fell to 3.2 per cent in October, and core prices rose at their slowest annual pace in two years.
Special Report
Diwali: India's festive boom runs on credit
Car dealers, electronics retailers and jewellers across India reported record sales over Diwali, helped along by the fastest growth of any major economy.
Special Report
Singles' Day: China's shoppers have lost their nerve
Alibaba and JD.com again declined to publish gross merchandise volume figures for Singles' Day, the second year running, and offered only vague claims that transactions had grown.
The recession rule that's flashing amber
After the October jobs report the Sahm Rule indicator reached 0.33 percentage points, an amber warning.
The 10-year hits 5%. Why now?
The ten-year US Treasury yield touched 4.99 per cent on 19 October, within a whisker of 5.0 per cent for the first time since July 2007.
Strong jobs, falling bonds
Non-farm payrolls rose by 336,000 in September, nearly double the consensus forecast.
The Fed takes back half its rate cuts
The Federal Reserve left rates unchanged at its September meeting and still managed to send a hawkish message.
Is "higher for longer" already priced in?
US consumer prices rose 3.7 per cent year-on-year in August, pushed up by a sharp rally in wholesale energy prices.
Unemployment rose, for a good reason
The unemployment rate rose from 3.5 to 3.8 per cent in August, and the first commentaries warned of a turning cycle.
Saudi Arabia keeps oil above $90
Saudi Arabia will keep its unilateral cut of one million barrels a day in place until the end of the year, and Brent crude is back above $90 a barrel.
Special Report
Labor Day: The job market is cooling the right way
For eighteen months economic orthodoxy held that bringing inflation down would require a painful jump in unemployment.
Bonds finally pay more than inflation
Ten-year US Treasury Inflation-Protected Securities (TIPS) now yield more than two per cent, for the first time since the financial crisis of 2009.
Economists can't agree on where rates should settle
At this year's Jackson Hole symposium, economists showed once again that they cannot agree on where the neutral rate of interest (r*) lies.
Explainer
What is the "right" interest rate anyway?
The ten-year Treasury yield rose toward 4.35 per cent, its highest since 2007, and bond investors are having to ask an awkward question.
America is borrowing like it's in a recession. It isn't
The federal deficit is approaching six per cent of GDP while unemployment sits near a historic low of 3.5 per cent.
Is the economy really this strong?
Second-quarter GDP grew at an annualised 2.4 per cent, confounding the many who forecast recession and suggesting consumers are still spending freely.
One more hike, then what?
Futures markets put the odds of a quarter-point rise at the July FOMC meeting at ninety-eight per cent, so the decision itself is settled.
Inflation hits 3%. The easy part is over
Headline US consumer price inflation fell to 3.0 per cent in June, and plenty of commentators declared the war won.
Inflation is falling without a recession. Can it last?
Consumer price inflation is slowing while the US economy still adds more than 200,000 jobs a month, and the optimists have found their gospel.
Special Report
Prime Day: What Amazon's discounts say about inflation
Shoppers spent an estimated $12.7 billion over Amazon's two-day Prime Day, an event that has become a rough gauge of how American consumers are holding up and what retailers can charge.
Banks passed the stress test. Now comes the real test
All twenty-three banks in the Federal Reserve's annual stress test passed in late June, showing on paper that they could survive a severe fall in commercial property prices and a global recession.
