U.S. Q3 GDP heading for a rise of 2.3%, led by consumer spending and business investment

October 6, 2025 3:23 PM UTC

With the US government shutdown not looking set for a quick resolution, it is a good time to take a fresh look at Q3 GDP, which is scheduled for October 30, the day after the FOMC next meets, though the release could be delayed even if the shutdown is over by then. We now look for an increase of 2.3

U.S. Fed's Miran - Expects significant services deflation via housing

October 3, 2025 2:00 PM UTC

Fed dove Miran sees Trump policy changes lowering the neutral rate, but less dramatically than his near term dovish view would imply.

FOMC Minutes from September 17 to show differing views on the future rates path

October 2, 2025 5:51 PM UTC

The Fed will continue to function during the government shutdown, and minutes from the September 17 meeting are due on October 8. They are likely to show a broad consensus in favor of the 25bps easing delivered at the meeting, but a variety of views on the appropriate path going forward.  The indiv

U.S. Fed's Logan - Need to be very cautious about rate cuts

October 2, 2025 2:46 PM UTC

Fed's Logan remains hawkish, but has no vote this year or next.

Preview: Due October 16 (dependent on shutdown ending) - U.S. September Retail Sales - Still growing, if more on prices than volumes

October 2, 2025 12:53 PM UTC

We expect a third straight 0.6% increase in retail sales in September, with slightly over half of the increase coming in prices, leaving only moderate growth in real terms. We also expect 0.6% increase ex autos but a slightly weaker 0.5% increase ex autos and gasoline. 

DM Central Banks: Wider-Ranging Conditions More Than Neutral Rates

October 2, 2025 6:55 AM UTC

·        Neutral policy rate estimates and forward guidance provide some help at the start of easing cycles, but less so at mid to mature stages.  For the Fed, ECB and BOE we look at a wider array of economic and financial conditions, alongside our own projections over the next 2 years to m

Preview: Due October 15 (dependent on shutdown ending) - U.S. September CPI - Firm but a little less so in core rate

October 1, 2025 6:29 PM UTC

We expect September CPI to increase by 0.4% overall and by 0.3% ex food and energy, matching August’s outcomes after rounding, though before rounding we expect overall CPI to be rounded down from 0.425%, and the core rate to be rounded up from 0.28%, contrasting August data when headline CPI was r

AI/Humanoid Robots and Disinflation?

October 1, 2025 9:40 AM UTC

·       Overall, a number of forces from the AI wave will impact inflation.  Power demand could push up power prices, but productivity enhancements and product innovation could be disinflationary like Information and Communications technology (ICT).  One other key uncertainty on a 1-5 year

U.S. Fed's Jefferson - Both mandates under pressure but more optimistic on 2026

September 30, 2025 12:50 PM UTC

Fed's Jefferson expects higher unemployment and inflation near term, but is more optimistic on 2026.

Trump Tariffs: China, Mexico and Semiconductors

September 30, 2025 8:00 AM UTC

  ·       Our baseline (60% probability) remains that a U.S./China trade deal will be agreed in Q4/Q1 2026 and it is possible though unlikely that this could be announced at the Trump/Xi meeting at the October 31 APEC summit – China requests that the U.S. changes policy on Taiwan could slo

U.S. Fed's Williams - Cautiously dovish

September 29, 2025 6:46 PM UTC

Fed's Williams is sounding more dovish than several Fed district presidents, but consistent with Powell.

U.S. Government Shutdown Expected Starting October 1

September 29, 2025 3:54 PM UTC

While a last minute deal is not to be ruled out, the US government looks set to shut down on October 1. Once a shutdown starts, the standoff could last for a few weeks, probably not as far as the next FOMC meeting on October 29, though that cannot be ruled out. As long as the government remains shut

DM Government Bond Saints v U.S.

September 29, 2025 7:35 AM UTC

·       Overall, although the fiscal saints (Australia/Canada/Germany/Sweden) have merits over the U.S. in the scenario where Fed independence is undermined and more Fed rate cuts occur than warranted by the economics, the 10yr area of other government bond markets may not outperform. 10yr go

U.S. August Personal Income and Spending - Core PCE Prices maintaining trend, still above target

September 26, 2025 1:09 PM UTC

August personal income at 0.4% and spending at 0.6% are both a little stronger than expected while price indices are in line, 0.3% for overall PCE and 0.2% for the core rate, with the latter 0.227% before rounding. Each price index underperformed the August CPI counterpart by 0.1% (August PPI was so

September Outlook: Into 2026 -- Market Implications

September 26, 2025 9:00 AM UTC

Our September Outlook is now published and please see all our markets chapters below.  

September Outlook: Into 2026

September 25, 2025 6:20 AM UTC

Our September Outlook is now published and please see all our economic and policy chapters below.  

U.S. Fed's Daly - Further rate cuts likely needed

September 24, 2025 8:21 PM UTC

Fed's Daly's is sounding less cautious about further easing than most regional Fed presidents.

Preview: Due October 3 - U.S. September Employment (Non-Farm Payrolls) - Still subdued, but slightly stronger than in August

September 24, 2025 3:28 PM UTC

We expect September’s non-farm payroll to show another subdued rise,  of 45k, with 50k in the private sector, but marginally stronger than July’s respective gains of 22k and 38k. We expect unemployment to slip to 4.2% from 4.3% on a fall in the labor force, while average hourly earnings maintai

Outlook Forecasts to download in Excel

September 24, 2025 9:30 AM UTC

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

U.S. Fed's Powell - Two-sided risks mean no risk-free path

September 23, 2025 4:51 PM UTC

Fed's Powell sees sees risks on both sides of the mandate, with no pre-set path for policy.

DM FX Outlook: USD steadies but vulnerable to equity correction

September 23, 2025 2:48 PM UTC

·       Bottom Line: The USD has continued to edge lower against the EUR in the last quarter as market expectations of Fed easing have increased following clear weakening in U.S. employment growth. But at this stage the data doesn’t indicate we are heading for recession, and this suggests w

Outlook Overview: Into 2026

September 23, 2025 8:25 AM UTC

·       The critical question is how much the U.S. economy is slowing down with the feedthrough of President Donald Trump’s tariffs to boost inflation and restrain GDP growth, with the effective rate currently around 17% on U.S. imports. Though semiconductor tariffs are likely, the bulk of

DM Rates Outlook: Steepening Yield Curve The Old Normal?

September 23, 2025 7:53 AM UTC

•    We continue to forecast further yield curve steepening across the U.S./EZ and UK, driven by cumulative easing.  For the U.S. this can see a modest further decline in 2yr yields, but the prospect is for a move to a premium of 2yr to Fed Funds (unless a hard landing is seen).  10yr yields

Equities Outlook: Correction Then Up In 2026

September 23, 2025 7:15 AM UTC

•    The U.S. equity market’s bullishness reflects good corporate earnings reality, buybacks and the AI story.  However, we feel that the U.S. economy can deteriorate still further in the coming months, as the lagged effects of tariffs boost inflation and restrain spending/hurt corporate ea

U.S. Fed's Bostic sees little reason to cut rates further

September 22, 2025 1:16 PM UTC

Fed's Bostic is sounding hawkish, but is a non-voter for 2025 and 2026.

U.S. Outlook: Fed Easing to Prevent Recession, but May Also Keep Inflation Above Target

September 22, 2025 10:15 AM UTC

•    GDP growth, supported in particular by business investment, was resilient in Q2, but growth in employment is now minimal and that will weigh on consumer spending, particularly with tariff-supported inflation set to restrain real wage growth. Recession is a risk if we see a vicious circle

Fed: Signals 25bps October and December

September 17, 2025 7:39 PM UTC

The median Fed Funds is a strong hint that the Fed will deliver an extra 50bps most likely with 25bps in October and December.  However, the split in the 2026 Fed Funds dots forecasts from FOMC members suggests that our forecast of just below trend growth and core PCE above target will likely mean

U.S. Fed's Powell - Moving towards neutral

September 17, 2025 6:56 PM UTC

Fed's Powell sees a changing balance of risks justifying easing towards, if not yet to, neutral. 

FOMC eases by 25bps, dots see two more 25bps moves this year

September 17, 2025 6:23 PM UTC

The FOMC has eased rates by 25bps to 4.0% to 4.75% with only one dissenting vote, the incoming Miran voting for 50bps. The main story in the dots is that the median sees two further 25bps moves this year rather than the expected one before seeing only one move in both 2026 and 2027, with no further

Preview: Due September 26 - U.S. August Personal Income and Spending - Core PCE Prices moving higher

September 16, 2025 3:36 PM UTC

We expect August data to show 0.3% gains in both overall and core PCE prices, with personal income also up by 0.3% and personal spending slightly stronger at 0.4%. The data will incorporate historical revisions through Q2 due with the annual GDP revision scheduled for September 25.

U.S. August Retail Sales - Still Resilient

September 16, 2025 12:48 PM UTC

August retail sales with a 0.6% increase, with the ex-auto and ex auto and gasoline gains both at 0.7%, are stronger than expected and suggest continued consumer resilience despite a slowing in employment growth. The rise modestly exceeds a 0.5% rise in CPI commodity prices in August.

September 16, 2025 10:53 AM UTC

In the unexpected scenario of an early death, Putin and Xi have no clear successors, and any new Russia or China leader would have to spend time building domestic strength and compromising on external goals. Erdogan also has no clear successors, which could create political uncertainty. For Trump su

Preview: Due September 16 - U.S. August Retail Sales - Autos to slip, but core rates to maintain trend

September 15, 2025 12:16 PM UTC

We expect a modest 0.2% increase in August retail sales restrained by a correction lower in auto sales. However we expect the core rates ex autos and ex autos and gasoline to maintain trend with gains of 0.4%. 

Taiwan: Grey Warfare or Naval Quarantine?

September 12, 2025 11:15 AM UTC

  ·       The most likely option for China is to continue the air and naval grey warfare around Taiwan, combined with support for pro-China factions in Taiwan parliament to build pressure for reunification at some stage. With invasion being too high risk for President Xi (with the U.S. main

FOMC Preview for September 17: 25bps Easing on Increased Labor Market Risk

September 12, 2025 10:30 AM UTC

The FOMC meets on September 17 and we expect a 25bps easing to a 4.0-4.25% Fed Funds target range. The FOMC will continue to see similar upside risks to inflation but increased downside risks to the Labor Market. The dots are likely to continue to expect only one more move in 2025, but three moves i