FOMC Preview For May 1: Signaling Concern on Inflation, Tapering Quantitative Tightening

April 25, 2024 7:04 PM UTC

Bottom Line: The FOMC meets on May 1 and rates look sure to remain at the current 5.25%-5.50% target range. The statement is likely to see some adjustments to reflect recent disappointment on inflation while repeating that more confidence on inflation moving towards target is needed before easing. I

Preview: Due April 26 - U.S. March Personal Income and Spending - Upside risk in Core PCE prices given Q1 outcome

April 25, 2024 3:41 PM UTC

March personal income and spending data will be largely old news as we have already seen Q1 totals in the GDP report. The GDP details are consistent with gains of 0.6% in personal income, 0.8% in personal spending and 0.4% in core PCE prices, all 0.1% above our pre-GDP forecasts of 0.5%, 0.7% and 0.

Q1 U.S. GDP Slows on Imports and Inventories, Core PCE Prices Stronger on the Quarter

April 25, 2024 1:14 PM UTC

Q4 GDP has come in weaker than expected at 1.6% annualized but with a stronger than expected 3.7% annualized increase in the core PCE price index. Weaker inventories and stronger imports are the main reason for the GDP slowing so the data is not a clear signal of underlying weakness. Lower initial (

Preview: Due April 25 - U.S. Q1 GDP - Slower but Still Healthy With Stronger Core PCE Prices

April 24, 2024 1:54 PM UTC

We expect a 2.4% annualized increase in Q1 GDP, significantly slower than the second half of 2023 but slightly stronger than the first half and still a heathy pace of growth. We expect a pick up in the core PCE price index to 3.4% annualized after two straight quarters at 2.0%.

Preview: Due May 3 - U.S. April Employment (Non-Farm Payrolls) - Still strong if a little less so, earnings may be above trend

April 22, 2024 4:44 PM UTC

We expect a 255k increase in April’s non-farm payroll, still strong if the slowest since November, with a 195k increase in the private sector. We expect an unchanged unemployment rate of 3.8% and a slightly above trend 0.4% increase in average hourly earnings, lifted by a minimum wage hike in Cali

Short-end European Government Bonds Following U.S. But June Decoupling

April 22, 2024 1:15 PM UTC

The Fed’s shift to higher for longer has spilled over to drag European government bond yields higher through April.  This now looks overdone as a June ECB rate cut is not fully discounted and ECB officials/data clearly point towards a 25bps cut.  UK money markets are more out of line, with a Jun

U.S. Fed's Bostic - No need to ease if labor market stays strong

April 18, 2024 4:21 PM UTC

U.S. Fed Beige Book Summary - Similar tone to last report

April 17, 2024 6:14 PM UTC

The latest Beige Book has a similar tone to that of March 6, if slightly stronger on activity, while seeing some easing of labor market tightness but little change in inflationary pressure.

U.S. March Retail Sales allow Q1 to come in marginally positive despite a weak start in January

April 15, 2024 12:56 PM UTC

March retail sales with a 0.7% increase have exceeded expectations despite an expected negative contribution from autos, with sales up by 1.1% both ex autos and in the control group that contributes to GDP, and by 1.0% ex autos and gasoline. This suggest continued consumer momentum entering Q2.

U.S. Fed's Schmid - Reason to think rates will stay higher for longer

April 12, 2024 7:40 PM UTC

Hawkish remarks from Schmid are probably the most notable of today's Fed talk, with Collins, Goolsbee and Bostic all maintaining the tone of recent comments.

Preview: Due April 15 - U.S. March Retail Sales - Up again on the month but weaker in Q1

April 12, 2024 1:18 PM UTC

We expect a 0.3% increase in March retail sales, which after a 0.6% February increase would not fully erase January’s 1.1% decline that was blamed on bad weather. Ex autos however we expect a rise of 0.5%, which after a 0.3% February increase would complete a reversal of a 0.8% decline in January.

U.S. Fed's Williams - Still looking for gradual inflation decline to persist, with bumps

April 11, 2024 1:21 PM UTC

Tone of FOMC Minutes From March 20 is Not Hawkish

April 10, 2024 6:54 PM UTC

FOMC minutes from March show little sign of disagreement and the tone is not hawkish, with participants expecting both inflation and the economy to slow, and there being a clear majority view that the pace of balance sheet reduction should soon be trimmed.  Optimism on inflation is however cautious

Preview: Due April 10 - U.S. March CPI - Core rate back to trend after two strong months

April 9, 2024 12:27 PM UTC

We expect March CPI to rise by 0.3% both overall and ex food and energy, though before rounding we expect the headline at 0.31% to exceed the core rate at 0.27%, the latter a return to trend after two straight disappointing 0.4% gains seen in January and February. 

Q1 U.S. GDP Looking Slower But Still With Significant Momentum

April 8, 2024 6:03 PM UTC

Our Q1 GDP estimate now stands at 2.0% annualized, not much changed from the 2.4% estimate we made in February, though this would now be the slowest quarter since a decline in Q2 2022. The Atlanta Fed’s nowcast is a little stronger than our view at 2.5%, though when we made our 2.4% forecast in Fe

U.S. Fed's Barkin - Jobs report quite strong

April 5, 2024 1:59 PM UTC

Could FOMC Minutes From March 20 Appear More Hawkish Than Powell?

April 4, 2024 6:55 PM UTC

FOMC minutes from March 20 are due on April 10.  Powell’s press conference at that meeting and his subsequent comments have been relatively dovish, downplaying recent strong data though he has also sounded in no hurry to ease. The minutes may show a significant minority expressing greater concern

Preview: Due April 5 - U.S. March Employment (Non-Farm Payrolls) - Slightly Slower but Labor Market Remains Strong

April 4, 2024 1:18 PM UTC

We expect a 230k increase in March’s non-farm payroll, which would be in line with the 6-month average but slightly below the 3-month. We expect a correction lower in unemployment to 3.8% from 3.9% and a moderate 0.3% increase in average hourly earnings. 

U.S. Fed's Kugler - Consistent with Powell

April 3, 2024 8:45 PM UTC

March Outlook: Europe in Focus, Then Elections Around the World

April 3, 2024 9:00 AM UTC

Asset Allocation: Pausing for Breath

April 2, 2024 9:00 AM UTC

Into Q2, data and policy (actual and perceived) will dominate DM markets. The ECB will likely take the spotlight with a 25bps cut on June 7, as the Fed face a better growth/more fiscal policy expansion and a tighter labor market than the EZ but also with a better productivity backdrop and outlook to

Preview: Due April 10 - U.S. March CPI - Core rate back to trend after two strong months

April 1, 2024 5:54 PM UTC

We expect March CPI to rise by 0.3% both overall and ex food and energy, though before rounding we expect the headline at 0.31% to exceed the core rate at 0.27%, the latter a return to trend after two straight disappointing 0.4% gains seen in January and February. 

U.S. Fed's Powell - Welcomes February core PCE prices but not in a hurry to ease

March 29, 2024 3:46 PM UTC

Preview: Due March 29 - U.S. February Personal Income and Spending - Core PCE prices seen less strong than core CPI

March 28, 2024 2:30 PM UTC

We expect February to deliver a 0.3% increase in the core PCE price index, above most recent months but slower than January’s 0.4% and a 0.4% rise in February’s core CPI, which was up only 0.358% before rounding. We expect a subdued 0.2% gain in personal income to underperform a 0.7% increase in