Preview: Due April 10 - U.S. March CPI - Gasoline softer, but upside risk on core rate

April 1, 2025 1:00 PM UTC

We expect March to increase by a subdued 0.1% overall but by 0.3% ex food and energy, with the core rate likely to be on the firm side at 0.335% before rounding. This will follow core rates of 0.2% in February and 0.4% in January, both of which were rounded down. 

U.S. Trade Surplus Countries: No Special Treatment?

March 31, 2025 9:04 AM UTC

Quick dilutions of tariffs or exemption will likely be slow in coming for countries that the U.S. has trade surpluses with, as the Trump administration are currently more focused on tariffs for tax revenue and trying to switch production back to the U.S. than trade deals.  Trade policy uncertainty

U.S. Fed's Daly - Two rate cuts this year still reasonable

March 28, 2025 2:38 PM UTC

Fed's Daly's is sticking to her view in line with the FOMC median, but some at the Fed have shifted.

U.S. February Core PCE Prices firm, Income outpaces Spending again

March 28, 2025 12:58 PM UTC

February’s core PCE price data at 0.4%, 0.365% before rounding) has come in considerably stronger than the 0.2% core CPI though the 2.8% yr/yr pace, with January revised up to 2.7% from 2.6%, is in line with a forecast from Fed’s Powell. Personal income was surprisingly strong with a 0.8% increa

Continuum Economics Calendar April 2025

March 28, 2025 11:41 AM UTC

Data and Events Calendar April 2025.

Preview: Due March 28 - U.S. February Personal Income and Spending - Core PCE Prices to outperform Core CPI

March 27, 2025 2:42 PM UTC

We expect a 0.3% rise in February’s core PCE price index, ahead of a 0.2% core CPI to partially offset a January underperformance when core PCE prices rose by 0.3% while core CPI surged by 0.5%. We also expect a subdued 0.1% rise in personal income to follow a strong 0.9% increase in January but p

March Outlook: Navigating the Turbulence

March 27, 2025 10:30 AM UTC

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

Car Tariffs Then Lenient Reciprocal Tariffs?

March 27, 2025 8:59 AM UTC

   The 25% tariffs on cars underlines that tariffs are not just about getting better trade deals, but in Trump’s view raising (tax) revenue and trying to shift production back to the U.S. Combined with other tariffs being implemented, plus policy uncertainty, we see a moderate overall hit from t

U.S. Fed's Musalem - Warns tariffs may cause tighter policy

March 26, 2025 5:38 PM UTC

Musalem's tariff warning comes with a 4pm ET Trump announcement on auto tariffs awaited.

Outlook Overview: Navigating the Turbulence

March 26, 2025 9:30 AM UTC

·       More tariffs will arrive from the U.S. from April with product (car, pharma, semiconductors and lumber) and reciprocal tariffs. President Trump has a 3-part approach to tariffs to raise (tax) revenue; bring production back to the U.S. and get fairer trade deals.  This means some of t

EMFX Outlook: Divergence versus the USD

March 26, 2025 9:16 AM UTC

EM currencies will be helped by the ongoing USD downtrend against DM currencies, but prospects also depend on relative inflation differentials versus the USD and starting point in terms of valuations.  The Brazilian Real (BRL), Mexican Peso (MXN) and Indonesian Rupiah (IDR) should all make modest s

Equities Outlook: Turbulence Ahead

March 26, 2025 9:05 AM UTC

·       U.S. trade wars will likely hurt U.S. growth and raise inflation, with only small to modest Fed easing and a 10yr budget bill that will likely be neutral to negative for the economy.  With valuations still very high (Figure 1), we see scope for a correction to extend into mid-year th

U.S. Fed's Kugler - Slower growth, rising inflation, steady policy

March 25, 2025 1:05 PM UTC

Fed Governor Kugler sees worrying signals in data and backs steady policy for some time.

DM Rates Outlook: Policy Divergence

March 25, 2025 9:30 AM UTC

 •    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. 10yr U.S. Treasury yields can be helped by this easing and see a move down through 2025.  However, the budget deficit will likely be 6.5-7.0%

DM FX Outlook: USD under pressure as Trump policies disappoint

March 25, 2025 8:51 AM UTC

·       Bottom Line: The market had expected the Trump presidency to see further fiscal expansion and consequent tight Fed policy and high US yields. But the combination of less tax cuts than previously expected and more aggressive tariff increases have led to reduced expectations for US grow

U.S. Fed's Bostic - Now sees one rate cut this year, rather than two

March 24, 2025 5:58 PM UTC

Tariff concerns appear to have moved Fed's Bostic in a more hawkish direction.

Preview: Due April 4 - U.S. March Employment (Non-Farm Payrolls) - Stronger than January, but slower than November and December

March 24, 2025 5:39 PM UTC

We expect a 165k increase in March’s non-farm payroll, both overall and in the private sector, to show the labor market remains healthy despite growing downside economic risks. We expect the unemployment rate to slip to 4.0% from 4.1%, and an in line with trend 0.3% increase in average hourly earn

U.S. Outlook: How Much Damage Will a Trade War Do?

March 24, 2025 3:45 PM UTC

•    The U.S. economy, consumer spending in particular, ended 2024 looking healthy, but with inflation still above its 2.0% target if well off its highs. The Trump administration’s more aggressive than expected trade war has made a return to the inflation target more difficult and raised dow

Trump Product and Reciprocal Tariffs

March 21, 2025 9:00 AM UTC

It appears that we will get bad news from April 2 on extra tariffs before any good news.  Firstly, the announcement effect of tariffs for many countries and extra products will hurt U.S. business and consumer sentiment.  Secondly, part of the reason for tariffs is extra tax revenue and to try to s

Fed: Cautious Policy Due To Uncertainty

March 19, 2025 7:26 PM UTC

The Fed do not appear to be in a hurry to cut interest rates, both as economic momentum remains reasonable and as the Fed waits to see how Trump administration policy feedthrough – especially tariffs to inflation. This suggests that the Fed will need to see a weaker economy and we pencil in one 25

U.S. Fed's Powell - Waiting for greater clarity

March 19, 2025 6:48 PM UTC

Fed's Powell is in no rush to change policy, and downplayed a technical reduction in QT.

FOMC leaves rates unchanged, dots unchanged but skew more hawkish

March 19, 2025 6:24 PM UTC

The FOMC has left rates unchanged at 4.25-4.5% as expected.  The median dots are unchanged but economic activity forecasts are weaker and the inflation forecast for 2025 is significantly stronger showing concern over the impact of tariffs. The statement notes increased uncertainty and announced a s

Uncertainty Over Pace and Scale of Extra European Defense Spending

March 18, 2025 9:05 AM UTC

·       The crucial date for more clarity is the June 24-26 NATO summit.  Donald Trump might attend but will ask for more spending.  NATO head Rutte’s desire is for above 3% of GDP for NATO countries, but the politics and budget suggest that a 2.5% minimum may only be agreed with Germany

Preview: Due March 28 - U.S. February Personal Income and Spending - Core PCE Prices to outperform Core CPI

March 17, 2025 4:15 PM UTC

We expect a 0.3% rise in February’s core PCE price index, ahead of a 0.2% core CPI to partially offset a January underperformance when core PCE prices rose by 0.3% while core CPI surged by 0.5%. We also expect a subdued 0.1% rise in personal income to follow a strong 0.9% increase in January but p

U.S. February Retail Sales - Q1 looking subdued, but reasons unclear

March 17, 2025 12:58 PM UTC

February retail sales with a gain of 0.2% overall is unimpressive, particularly with January revised down to -1.2% from -0.9% while gains of 0.3% ex auto and 0.5% ex auto and gas fail to reverse respective January decline of 0.6% and 0.8%. However the control group, which contributes to GDP, with a

Preview: Due March 17 - U.S. February Retail Sales - Only a partial reversal of January's drop

March 14, 2025 12:58 PM UTC

We expect US retail sales to rise by 0.5% in February in what would be only a partial reversal of a 0.9% decline in January. Ex autos we expect a 0.3% increase after a 0.4% January decline while ex autos and gasoline we expect a 0.4% increase after a 0.5% January decline.

Trump’s Policies and U.S. Equities

March 13, 2025 8:35 AM UTC

Models would suggest that the current and prospective direct tariff impact should slow GDP growth to a 1.5% pace, which should see slow Fed easing in 2025 given the boost to inflation. However, the policy uncertainty means that business and consumer behaviour could see a large adverse hit that keeps

FOMC Preview for March 19: No change and few clear signals given exceptional uncertainty

March 12, 2025 6:46 PM UTC

In the current exceptionally uncertain environment, the FOMC looks set to keep rates unchanged at 4.25-4.5% at its March 19 meeting, and give little away on future policy. The dots will be closely watched but we expect they will change little from January 29. Powell is likely to stress at the press

U.S. February CPI - Renewed progress, but threatened by tariffs

March 12, 2025 12:58 PM UTC

February CPI is softer than expected with gains of 0.2% both overall and ex food and energy, with the ex food and energy rate up by 0.227% before rounding. Coming after a strong January conclusions should be cautious, while upcoming months may be lifted by tariffs. However, the data will come as a r

Preview: Due March 12 - U.S. February CPI - Not as firm as January, but upside risks persist

March 11, 2025 12:10 PM UTC

We expect February’s CPI to increase by 0.3% both overall and ex food and energy, with the gains before rounding being 0.29% overall and 0.32% ex food and energy. The gains will be less strong than in January but a tendency for early year data to be strong is likely to persist. Tariffs on China wi

China: PBOC Slow Cuts with 5% Nominal GDP

March 11, 2025 8:45 AM UTC

•    The PBOC will likely cut slowly and gradually, as China seeks to avoid Yuan depreciation that could worsen the trade war with the U.S.  Additionally, MOF last week forecast nominal GDP of 5%, which with a real GDP target of 5% means that MOF is also forecasting zero inflation.  Close to

Trump and Dollar Policies

March 10, 2025 6:04 AM UTC

   The Trump administration could decide to more broadly talk the USD down or less likely try to reach a cooperative Mar A Lago accord with big DM and EM countries. A more cohesive alternative is a forced currency deal for countries to appreciate their currencies to avoid more tariffs and withdraw

U.S. Fed's Powell - Well positioned to wait for greater clarity

March 7, 2025 6:10 PM UTC

Currently the tone of data and policy uncertainty justifies steady Fed policy.

Preview: Due March 17 - U.S. February Retail Sales - Only a partial reversal of January's drop

March 7, 2025 2:53 PM UTC

We expect US retail sales to rise by 0.5% in February in what would be only a partial reversal of a 0.9% decline in January. Ex autos we expect a 0.3% increase after a 0.4% January decline while ex autos and gasoline we expect a 0.4% increase after a 0.5% January decline.

U.S. February Employment - Detail mostly on weak side of trend

March 7, 2025 1:54 PM UTC

February’s non-farm payroll with a 131k increase in not far from consensus with near neutral back revisions, but does suggest momentum is slowing in Q1, though probably in part on weather. Other detail is on the soft side, with average hourly earnings up 0.3% with net negative revisions, and the w

Preview: Due March 7 - U.S. February Employment (Non-Farm Payrolls) - Stronger than January, but slower than November and December

March 6, 2025 3:00 PM UTC

We expect a 210k increase in February’s non-farm payroll, with 190k in the private sector, slightly stronger than in January but slower than in November and December. We expect unemployment to remain at 4.0% and a 0.3% rise in average hourly earnings, following an above trend 0.5% in January.

U.S. Fed Beige Book Summary - Slowing growth, some uptick in prices

March 5, 2025 7:16 PM UTC

The latest Fed Beige Book looks a little slower on activity but slightly stronger on prices, though wage pressures slowed. 

Trump Latest Thinking

March 5, 2025 11:07 AM UTC

Bottom line: President Donald Trump signaled that he is committed to tariffs to raise revenue; bring production back to the U.S. and get fairer trade relations.  This three part approach will likely shape implementation of further product and reciprocal tariffs from April.  However, reports sugges

U.S. Fed's Williams - Beginning to factor in tariff impact on prices

March 4, 2025 7:45 PM UTC

Fed's Williams' tone is cautious but he expect tariffs to have a high pass-through to consumers.

Preview: Due March 12 - U.S. February CPI - Not as firm as January, but upside risks persist

March 4, 2025 5:38 PM UTC

We expect February’s CPI to increase by 0.3% both overall and ex food and energy, with the gains before rounding being 0.29% overall and 0.32% ex food and energy. The gains will be less strong than in January but a tendency for early year data to be strong is likely to persist. Tariffs on China wi

Trump Tariffs: Bad for The U.S. Worse For Canada

March 4, 2025 3:48 PM UTC

When Trump announced 25% tariffs on Canada and Mexico in February, we put up a piece outlining the likely economic consequences, which became dated by the end of the day as Mexico and Canada won a one month delay in return for some concessions at the border. We are now recycling that story, with som

Trump Tariffs and U.S. Business and Consumer Sentiment

March 3, 2025 9:02 AM UTC

 •    Mexico and Canada are trying to frantically find solutions to delay across the board tariffs again, though the U.S. is hinting that the rate could be less than 25%.  China extra 10% tariff remains likely, as the U.S. increases trade pressure on China.  More tariffs also remain highly

U.S. January Core PCE Prices as expected, special factors bring some surprises elsewhere

February 28, 2025 2:07 PM UTC

January’s PCE price data, up 0.3% both overall and core (0.325% and 0.285% respectively before rounding) is in line with expectations, but significantly less alarming than the respective CPI gains of 0.5% and 0.4%. There were some surprises elsewhere, with income sharply ahead of spending and a ma

China: How Much U.S. Trade and Taiwan Pressure?

February 28, 2025 9:05 AM UTC

·       Trump eventually wants a trade deal with China and this could occur by the end of 2025, but the U.S. will ask for penalties if targets for U.S. imports to China are not met and this will lead to difficult negotiations. Reciprocal and product specific tariffs on China are also likely i