What the Fed's forecasts really say
The Summary of Economic Projections released at the Federal Reserve’s June meeting was an exercise in quantitative defiance.
Economy
The Fed wants to pause without looking soft
Central banking is largely an exercise in rhetorical choreography, and the Federal Reserve’s impending June decision requires an unusually delicate routine.
The jobs report that disagrees with itself, again
Few macroeconomic rituals generate as much cognitive dissonance as the monthly US employment release, and the May figures were a masterpiece of statistical contradiction.
Nobody can agree how much savings Americans have left
The primary macroeconomic debate of 2023 has coalesced around a deceptively simple question: how much money do American households have left in their pandemic savings accounts?
Why core inflation stopped falling
The publication of April’s consumer price index delivered a headline inflation rate that moderated to 4.9 per cent year-on-year—the first sub-5 per cent print in two years.
Tighter loans today, more defaults tomorrow
The Federal Reserve’s Senior Loan Officer Opinion Survey (SLOOS) is rarely treated as front-page news, but within quantitative credit research, it is revered as the single most dependable leading indicator of commercial default cycles.
Watching deposits leave in real time
In normal economic cycles, the Federal Reserve’s weekly H.8 release on commercial bank assets and liabilities is an arcane statistical publication read only by bank equity analysts and money market economists.
OPEC just made the Fed's job harder
On Sunday, 2 April, the OPEC+ alliance delivered an unexpected geopolitical thunderbolt across global commodity markets, announcing a surprise production cut of 1.16 million barrels per day.
Are bank failures doing the Fed's job for it?
As the dust settled on the frantic weekend that dismantled Silicon Valley Bank and Signature Bank, Federal Reserve policymakers confronted a radically altered macroeconomic calculus ahead of their March FOMC meeting.
The Fed's quiet bailout of banks' bad bond bets
When the Federal Reserve published its weekly H.4.1 balance-sheet release on Thursday, 16 March, the numbers confirmed the staggering scale of the banking system’s emergency triage.
Powell signals bigger hikes are back
Jerome Powell’s semi-annual monetary policy testimony before the Senate Banking Committee was an unsparing rhetorical reset.
When the data changes after the decision
The January personal consumption expenditures (PCE) report arrived as a bitter shock to Eccles Building policymakers, with core PCE advancing 0.6 per cent month-on-month and lifting the annual rate to 4.7 per cent.
Did shoppers really spend 3% more in January?
The release of January’s US retail sales data delivered a thunderous headline advance of 3.0 per cent month-on-month, extinguishing talk of an imminent consumer rollover and prompting economists to scramble for their growth models.
Special Report
Valentine's Day: Markets still love rate cuts. The Fed doesn't love them back
Financial markets have spent the past eighteen months engaged in an unrequited romance with Federal Reserve rate cuts.
Last year's inflation just got rewritten
On 10 February, the Bureau of Labor Statistics released its routine annual seasonal revisions to the consumer price index, and in doing so, quietly rewrote the monetary history of late 2022.
517,000 jobs and the end of the rate-cut dream
The January establishment payroll report was a devastating reality check for the global bond market.
Meta's new growth story: buying back its own shares
When Meta Platforms reported fourth-quarter earnings, it delivered an anodyne revenue print and an uninspiring operating outlook.
The inflation number the Fed secretly cares about
The December consumer price index confirmed that headline US inflation is descending from its summer summit, printing at 6.5 per cent year-on-year.
Tech's layoffs are really about profits
The corporate technology sector ushered in 2023 with a wave of workforce reductions that seemed at total odds with broader labour market resilience.
Special Report
New Year: Everyone expects a recession. That's the warning sign
As institutional forecasters inaugurate 2023, consensus has reached a degree of unanimity that should terrify any experienced market participant.
Is the recession alarm broken?
The yield curve is the bond market’s most revered oracle, and throughout late 2022 it has been screaming danger.
How long can shoppers keep spending their pandemic savings?
Throughout 2022, consumer spending remained the immovable pillar holding the US economy aloft against the fastest monetary tightening cycle in forty years.
The Fed and the market disagree. Someone is wrong
The Federal Open Market Committee raised the benchmark policy rate to a range of 4.25 to 4.50 per cent in December and published a Summary of Economic Projections that penciled in a terminal rate of 5.1 per cent for 2023.
Goods are getting cheaper. Services aren't
The November consumer price index print, which arrived at 7.1 per cent year-on-year, prompted widespread relief across risk markets, driven primarily by an outright 0.5 per cent month-on-month drop in core goods prices.
Wages are rising — by how much depends on who you ask
The release of November's average hourly earnings—advancing at a vigorous 0.6 per cent month-on-month—sent fixed-income algorithms into a defensive crouch.
China reopens, and the world gets a new inflation problem
The western narrative that China's eventual retreat from zero-Covid would deliver an unalloyed disinflationary impulse to the global economy is about to collide with industrial reality.
Special Report
Cyber Monday: What the discounts say about inflation
The bond market is screaming recession
For more than four decades, the slope of the US sovereign yield curve has served as the financial markets' most reliable predictive mechanism for the business cycle.
Rents are already falling. Official data hasn't noticed
Among the many statistical anomalies embedded in the US macroeconomic dashboard, none is currently creating more analytical distortion than the housing component of the consumer price index.
One good inflation report does not make a trend
The release of the October consumer price index on 10 November ignited the most ferocious global asset rally of the year.
The jobs report that contradicts itself
The release of the October employment situation report presented macroeconomic analysts with an institutional contradiction so pronounced that it resembles two entirely separate economies operating within the same borders.
Why slowing down could mean the Fed goes higher
As the Federal Open Market Committee gathers for its November policy deliberations, interest rate futures are pricing a fourth consecutive 75-basis-point increase, bringing the policy rate to 3.75 to 4.00 per cent.
Two jobs reports, two stories. Which one matters?
Every first Friday of the month, financial markets assemble to dissect the official US employment situation summary, treating the release as a unified economic transmission.
Nineteen Fed officials, nineteen different futures
The Federal Open Market Committee's Summary of Economic Projections is designed to project institutional consensus and anchor market expectations.
The inflation the Fed can't fix: your haircut and your dentist
Central bankers like to project an image of omnipotent precision, as though adjusting the cost of overnight money can recalibrate every price tag in the modern economy.
Don't bet on inflation falling just because the maths says so
The celebratory mood across equity trading desks relies on mistaking a statistical deceleration for an economic armistice.
The Fed has found its cheapest weapon: going big early
There is an unspoken economy in monetary policy that central bankers rarely acknowledge in formal testimony: the sheer convenience of panic.
