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July 03, 2025

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U.S. June Employment - Some signs of slowing activity, but lower unemployment suggests no urgency for Fed easing
Freemium Article

July 3, 2025 1:09 PM UTC

June’s non-farm payroll is surprisingly strong overall with a rise of 147k, with 16k in net upward revisions, but private payrolls at 75k are weaker than expected, with 16k in net negative revisions. Unemployment unexpectedly fell to 4.1% from 4.2%, but average hourly earnings are weaker than expe

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U.S. Assets and Valuation
Paying Article

July 3, 2025 9:30 AM UTC

    The U.S. equity market has returned to be clearly overvalued on equity and equity-bond valuations measures and is vulnerable to a new correction in H2 on any moderate bad news (e.g. further economic slowing and corporate earnings downgrades).   In contrast, U.S. Treasuries are at broadly fai

July 02, 2025

U.S. Fed's Barkin - Puts focus on unemployment
Paying Article

July 2, 2025 8:10 PM UTC

Fed's Barkin remains in no rush to ease though policy will depend on incoming data.

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Preview: Due July 17 - U.S. July Retail Sales - Mostly subdued
Paying Article

July 2, 2025 3:20 PM UTC

We expect a 0.1% increase in June retail sales to follow two straight declines, with a 0.3% incase ex autos that will reverse a 0.3% May decline. Ex autos and gasoline, we also expect a 0.3% increase, after a 0.1% May decline that followed a 0.1% April increase. 

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Preview: Due July 3 - U.S. June Employment (Non-Farm Payrolls) - Increasing signs of slowing, but not a recession
Paying Article

July 2, 2025 1:01 PM UTC

We expect a 75k increase in June’s non-farm payroll, significantly slower than May’s 139k though consistent with a slowdown in growth rather than an economy entering recession. We expect an in line with trend 0.3% increase in average hourly earnings and an uptick in unemployment to 4.3% after th

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DM Central Banks: Overlooking Lagged 2021-23 Tightening and QT?
Paying Article

July 2, 2025 8:30 AM UTC

We are concerned that DM central banks are underestimating the lagged impact of 2021-23 tightening and ongoing QT, which impacts the transmission mechanism of monetary policy.  Central banks need to consider cyclical and structural issues, but also need a more rounded view of the stance and implica

July 01, 2025

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Preview: Due July 15 - U.S. June CPI - A little more from tariffs
Paying Article

July 1, 2025 6:42 PM UTC

We expect June CPI to increase by 0.3% overall and by 0.3% ex food and energy, with the overall pace close to 0.3% before rounding but the core rate rounded up from 0.27%. This would still be the strongest core rate since January and reflect tariffs starting to feed through, something expected by Fe

Senate adds more debt to the U.S. budget bill, and sends it back to the House
Paying Article

July 1, 2025 5:35 PM UTC

The Senate has passed its version of the “One Big Beautiful Bill” relying on the casting vote of Vice-President Vance. The Senate’s version adds more to the deficit than the version previously passed by the House, also passed by only one vote, meaning that a rapid approval of the Senate versio

U.S. Fed's Powell - Prudent to wait but won't take July off the table
Paying Article

July 1, 2025 2:46 PM UTC

Fed's Powell states policy is data-dependent. He expects higher inflation while watching for labor market weakness he does not expect.

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Trump Tariffs: Poker Face?
Paying Article

July 1, 2025 12:55 PM UTC

Our central scenario (but less than 50%) is towards a scenario of compromise, with some agreements in principle or trade framework deals, delays for most other negotiating in good faith but with one or two countries seeing a reciprocal tariff rise e.g. Spain and/or Vietnam.  This could still be fol

June 30, 2025

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U.S. and Asia Defense Partners
Paying Article

June 30, 2025 7:30 AM UTC

 ·        Japan, S Korea and Australia could eventually agree to some extra commitment to increase (self) defence spending in the next 5-10 years though perhaps not targets like NATO countries.  This could come as part of the trade deal negotiations currently underway.  Japan and S Korea

June 27, 2025

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U.S. Q2 GDP to see only a modest rebound from a decline in Q1
Paying Article

June 27, 2025 6:05 PM UTC

The release of advance May trade and inventory data, plus May consumer spending, provides us with clearer signals on Q2 GDP, even if we have not yet seen any data for June. We currently expect a modest annualized gain of 1.4%, following a 0.5% decline in Q1, leaving a subdued first half of the year.

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U.S. May Personal Income and Spending slip, Core PCE Prices above consensus but not alarming
Paying Article

June 27, 2025 12:59 PM UTC

May’s core PCE price index, while not alarming, is at 0.2% a little firmer than expected, with yr/yr growth rising to 2.7% from an upwardly revised 2.6% (from 2.5%) in April. Personal income and spending data is weak, down by 0.4% and 0.,1% respectively.

U.S. Fed's Kashkari - Expects two rate cuts this year, possible first cut in September
Paying Article

June 27, 2025 12:11 PM UTC

Kashkari's view puts him on the Fed's median dot. The skew on the dots is hawkish but the decision will depend on data.

June 26, 2025

U.S. Fed's Barr - Fears tariffs could lead to persistent inflation
Paying Article

June 26, 2025 5:35 PM UTC

Fed's Barr continues to warn that a tariff boost to inflation could have some persistence.

Preview: Due June 27 - U.S. May Personal Income and Spending - Core PCE Prices to match Core CPI
Paying Article

June 26, 2025 2:25 PM UTC

We expect a 0.1% rise in May’s core PCE price index, matching to core CPI, continuing to show limited tariff pass-through. Subdued data are also likely from personal income, which we expect to be unchanged, and personal spending, where we expect a 0.1% decline. Downward revisions to Q1 income and

U.S. Fed's Daly - Fall promising for a rate cut
Paying Article

June 26, 2025 1:46 PM UTC

Fed's Daly is giving what appears to be a mainstream Fed view.

Continuum Economics Calendar July 2025
Paying Article

June 26, 2025 1:00 PM UTC

Data and Events Calendar July 2025.

June 25, 2025

U.S. Fed's Collins - Calling for patience, as are most Fed speakers
Paying Article

June 25, 2025 1:59 PM UTC

Fed's Collins, as are most Fed speakers, is backing the wait-and-see approach to policy, particularly in regard to tariffs. 

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June Outlook: Trump’s Fluid Policies
Paying Article

June 25, 2025 10:00 AM UTC

All chapters of the June Outlook are now available and simply click the link below. 

Outlook Forecasts to download in Excel
Paying Article

June 25, 2025 9:30 AM UTC

Below is an Excel file that contains our headline forecasts for GDP, Inflation, Monetary Policy, and Exchange Rates.

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EM FX Outlook: USD Less in Favor, but EM Mixed
Freemium Article

June 25, 2025 8:05 AM UTC

·       The Chinese Yuan (CNY) will likely remain stable while trade negotiations with the U.S. continue.  We see a trade deal in our baseline (probably Q4) and then a small rise in CNY v USD due to general USD weakness. 
·       In terms of total returns for the remainder of 2025, th

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Outlook Overview: Trump’s Fluid Policies
Paying Article

June 25, 2025 7:20 AM UTC

·       President Donald Trump still wants to use the tariff tool, and we see the eventual average tariff rate being in the 13-15% area, lowered by deals but increased by more product tariffs. Any lasting legal block on reciprocal tariffs will likely see the administration pivoting towards ot

June 24, 2025

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Tariffs and the Timing of FOMC Easing
Freemium Article

June 24, 2025 6:06 PM UTC

While two Fed Governors. Waller and Bowman, have suggested a July easing could be appropriate, testimony from Chairman Powell suggests a move that early is unlikely, though September is possible if inflation data continues to show a lack of feed through from tariffs. We, and Powell, expect some acce

U.S. Fed's Williams Backs steady policy, Powell expecting tariffs to lift inflation
Paying Article

June 24, 2025 4:45 PM UTC

Fed's Williams is backing Powell's caution over easing. Powell is suggesting inflation data for June, July and August will be crucial. 

U.S. Fed's Powell - Expected inflation keeping rates above neutral
Paying Article

June 24, 2025 2:56 PM UTC

Fed's Powell is reluctant to ease because inflation is expected to rise on tariffs.  Future policy will depend on incoming data.

U.S. Fed's Powell - Sticking to wait and see view
Paying Article

June 24, 2025 1:48 PM UTC

Fed's Powell, consistent with last week's post-FOMC press conference, seems in no rush to ease in his testimony to Congress.

U.S. Fed's Hammack - May stay on hold for some time
Paying Article

June 24, 2025 1:36 PM UTC

Cleveland Fed President Beth Hammack is sounding hawkish, in contrast to Bowman yesterday.

U.S. Fed's Bostic - Sees one rate cut late this year
Paying Article

June 24, 2025 10:54 AM UTC

Fed's Bostic continues to see only one rate cut this year, not backing Bowman's dovish view given yesterday.

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Equities Outlook: Choppy Then 2026 Gains
Paying Article

June 24, 2025 8:15 AM UTC

       Though the U.S. equity market has rebounded, we still scope for a fresh dip H2 2025 to 5500 on the S&P500 as hard data softens further to feed into weaker corporate earnings forecasts and CPI picks up and delays Fed easing.  However, the AI story is still a positive, while share buybacks

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DM FX Outlook: USD uncertainty increases as Trump changes the rules
Paying Article

June 24, 2025 7:05 AM UTC

·       Bottom Line: After making initial gains after the election, the USD has followed a similar path to the first Trump presidency, falling back steadily this year as optimism on the economy has faded, with the introduction of tariffs contributing to more negative sentiment. Much as in the

June 23, 2025

U.S. Fed's Goolsbee - Impact of tariffs not as bad as feared
Paying Article

June 23, 2025 5:50 PM UTC

Fed's Goolsbee has added his voice to those of Waller and Bowman, noting that tariffs have lifted inflation less than feared.

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Iran: Measured Next Steps?
Paying Article

June 23, 2025 3:17 PM UTC

  A measured or modest Iran retaliation could be used by the U.S. to seek a path back towards negotiation.  Israel would likely want to continue to degrade Iran nuclear and military facilities, but the U.S. could eventually pressure Israel to stop.  This is our baseline, though the military attac

U.S. Fed's Bowman - Openness to July easing a dovish shift
Paying Article

June 23, 2025 2:40 PM UTC

Fed Governor Bowman's openness to a July easing is a surprise, coming from someone who has recently been a hawk.

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DM Rates Outlook: Yield Curve Steepening?
Paying Article

June 23, 2025 8:30 AM UTC

•    We see the U.S. yield curve steepening in the next 6-18 months. 2yr U.S. Treasury yields can step down with cautious Fed easing on a modest/moderate growth slowdown and also if the Fed keeps an easing bias in H2 2026. 10yr U.S. Treasury yields face a tug of war between lower short-dated y

June 20, 2025

U.S. Fed's Barkin - Contrasts dovish earlier remarks from Waller
Paying Article

June 20, 2025 4:53 PM UTC

Fed's Barkin sees no rush to ease. Earlier Fed's Waller said the Fed could move as early as July.

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Preview: Due July 3 - U.S. June Employment (Non-Farm Payrolls) - Increasing signs of slowing, but not a recession
Freemium Article

June 20, 2025 4:29 PM UTC

We expect a 75k increase in June’s non-farm payroll, significantly slower than May’s 139k though consistent with a slowdown in growth rather than an economy entering recession. We expect an in line with trend 0.3% increase in average hourly earnings and an uptick in unemployment to 4.3% after th

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U.S. Outlook: Slowdown but not Recession, Cautious Fed Easing
Paying Article

June 20, 2025 2:14 PM UTC

•    Policy uncertainty remains high and final details of the tariffs will depend on the decisions of the courts as well as those of President Trump. However the magnitude of the tariffs is becoming easier to predict than the detail. Trump looks set to insist on a minimum average tariff of at

June 18, 2025

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Fed: Hold Then Cautious Easing
Paying Article

June 18, 2025 7:27 PM UTC

Though the SEP reduced growth forecasts and boosted inflation, the guidance from the Fed remains that policy is on hold in the coming meetings.  Though the FOMC median still has two 2025 cuts, the breakdown shows that this was a close call and a lot of members see no cut or only 25bps. We look for

U.S. Fed's Powell - Expecting tariffs to feed into inflation despite recent softer data
Paying Article

June 18, 2025 6:48 PM UTC

Fed's Powell, while welcoming recent softer inflation data, is still wary of the risk from tariffs.

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FOMC more pessimistic than March forecasts but not compared to May statement
Paying Article

June 18, 2025 6:23 PM UTC

The FOMC has left rates unchanged at 4.25-4.50% as expected. The median rate forecast is unchanged at 3.9% for end 2025 but the FOMC now sees only 25bps of easing in 2026 rather than 50bps, with 2027 still seeing 25bps, but the end 2027 rate is now seen at 3.4% from 3.1%, leaving a slightly hawkish

June 17, 2025

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Preview: Due June 27 - U.S. May Personal Income and Spending - Core PCE Prices to match Core CPI
Paying Article

June 17, 2025 3:02 PM UTC

We expect a 0.1% rise in May’s core PCE price index, matching to core CPI, continuing to show limited tariff pass-through. Subdued data are also likely from personal income, which we expect to be unchanged, and personal spending, where we expect a 0.1% decline.

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U.S. May Retail Sales - Two straight declines as confidence slides
Freemium Article

June 17, 2025 12:50 PM UTC

May retail sales with a 0.9% decline are slightly weaker than expected. The ex auto data at -0.3% and ex auto and gas at -0.1% are negative too, though the control group which contributes to GDP was resilient with a 0.4% rise. 

June 16, 2025

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Preview: Due June 17 - U.S. May Retail Sales - Autos to correct lower, underlying momentum subdued
Freemium Article

June 16, 2025 12:07 PM UTC

We expect a 0.7% decline in May retail sales as auto sales show a sharp reversal from recent strength. Ex autos we expect a subdued 0.1% increase, with a 0.2% rise ex autos and gasoline. Both of these outcomes would match those of April.

June 12, 2025

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Trump Tariffs: China and July 9 Reciprocal Deadline
Paying Article

June 12, 2025 7:17 AM UTC

 We attach a 65% probability to a U.S./China reaching a new trade deal that reduces the minimum overall tariff to 15-20% imposed by the U.S., most likely agreed in Q4 2025 and to be implemented in 2026.  However, a 35% probability exist of no deal and this could eventually mean higher tariffs (Fig

June 11, 2025

U.S. Budget Deficit falls in May, Tariffs explaining over half of the narrowing
Paying Article

June 11, 2025 6:28 PM UTC

May saw a budget deficit of $316bn, down from $347.1bn in May 2024, though the deficit in the fiscal year to date of $1364.7bn is up from $1202.3bn in the eight months to May 2024. The 12-month average has however slipped below $2trillion for the first time in the current fiscal year. The deficit in

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FOMC Preview for June 18: No change in rates or dots, only marginal changes to statement and forecasts
Paying Article

June 11, 2025 4:01 PM UTC

The June 18 FOMC meeting looks highly likely to leave rates unchanged at 4.25-4.5%. We expect only marginal changes to May’s statement and the Fed’s median forecasts from March, with no change at all in the median dots on rates.  Chairman Powell at the press conference may welcome recent signal

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U.S. May CPI - Little tariff pass-through, with inflationary pressures elsewhere fading
Paying Article

June 11, 2025 12:59 PM UTC

May CPI has surprised significantly to the downside, up only 0.1% both headline and core, with the respective gains before rounding being 0.08% and 0.13%. The data is subdued across the board, with commodities ex food and energy unchanged despite tariffs and services ex energy on the low side of tre

June 10, 2025

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Preview: Due June 11 - U.S. May CPI - Tariff impact still modest, but starting to build
Paying Article

June 10, 2025 1:03 PM UTC

We expect May CPI to increase by 0.2% overall and by 0.3% ex food and energy, the core rate still seeing a modest impact from tariffs given a Q1 inventory build up and uncertainty over low long tariffs will persist, though at 0.32% before rounding we expect the strongest rise in the core rate since

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U.S. Deficit and Government Debt Concerns
Paying Article

June 10, 2025 9:00 AM UTC

 The large U.S. budget deficit has helped push up 10yr real yields to 2% in 2024/2025, but both the budget deficit (heavy issuance) and government debt trajectories (sustainability and rating concerns) are key going forward if the 10yr budget bill passed is similar to the House Bill.  Foreign acco