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July 26, 2024
FOMC Preview for July 31: Opening the Door for Data-Dependent Easing
July 26, 2024 2:18 PM UTC
Bottom Line: The FOMC meets on July 31 and while a change in rates remains unlikely, the FOMC is likely to signal that easing is possible if data before the next meeting on September 18 provides further evidence of falling inflationary pressure. This will see changes to the wording of the statement,
July 22, 2024
Biden Drops Out, But Yield Curve Still to Steepen
July 22, 2024 8:10 AM UTC
President Joe Biden dropping out will create more uncertainty about the U.S. presidential race, but also crucially mean that the House of representative race is a close call. This could stall some Trump trades, though we still see a swing to a positive 10-2yr U.S. Treasury yield curve – given Fe
July 18, 2024
Trump 2.0: Markets Guessing Policy Priorities
July 18, 2024 9:10 AM UTC
If Trump is elected president we still feel that the top priorities for implementation will likely be reducing immigration and making permanent tax cuts that are due to lapse in 2025. Trump would likely jawbone on all issues, but actual policy changes are more important for persistent moves in mar
July 17, 2024
U.S. Household Wealth: Bottom 50% Need Income
July 17, 2024 9:00 AM UTC
Beneath the surface Federal Reserve data shows that the bottom 50% of households have little net wealth and they depend on employment income and government handouts. With excess post COVID government handouts having been largely exhausted, lower income households are starting to suffer from slowin
July 16, 2024
July 15, 2024
July 12, 2024
EZ and UK Government Bonds: Decoupling From the U.S.?
July 12, 2024 9:37 AM UTC
Different economic and inflation dynamics, plus no constraint from trade weighted exchange rates, means that the ECB and BOE can cut irrespective of the Fed in the coming quarters. This can see 2yr yields decline, though less so in Germany where a 2.5% ECB depo rate is already discounted. 10yr y
July 11, 2024
July 09, 2024
Israel and Hezbollah: Tensions or War?
July 9, 2024 2:28 PM UTC
Tensions are growing between Israel and Hezbollah, though the odds of a war in the next 6 months remain modest. Military strategists note that such a war would require a large scale ground offensive and this is difficult given the war in Gaza.
July 04, 2024
US Equities: Soft v Harder Landing More Than Politics
July 4, 2024 11:05 AM UTC
The U.S. equity market sees positives and negatives behind the volatility of U.S. presidential expectations, partially as Donald Trump is seen to be in favour of lower corporate tax rates. We see the soft versus harder landing for the U.S. economy as being more important, as a harder landing could
July 03, 2024
FOMC Minutes from June 12 - Economy Seen Cooling But Little Discussion of Easing
July 3, 2024 6:52 PM UTC
FOMC minutes from June 12 show that the vast majority assessed that growth in economic activity appeared to be gradually cooling and the views expressed on inflation are cautiously optimistic. However there was agreement that easing would not be appropriate until they had gained greater confidence o
July 01, 2024
EM After the Elections: Fiscal Focus and Inflation Questions
July 1, 2024 8:05 AM UTC
Enhancing fiscal credibility is key post-election in India and S Africa, but also for Brazil. India, will do this in the 3 week of July, but S Africa needs to move from ANC/DA led coalition optimism to reality quickly. Brazil needs to stop the vicious circle of sentiment building up on fiscal slip
June 27, 2024
FOMC Minutes from June 12 to Look Less Hawkish Than Those from May 1
June 27, 2024 6:51 PM UTC
FOMC minutes from June 12 are due on July 3. We expect less alarming inflation data seen since the previous meeting on May 1 will see the tone of the minutes less hawkish than those from May 1. That could support a view that the Fed might ease by more this year than the one 25bps move seen in the la
June 24, 2024
DM Rates Outlook: Rate Cuts Arrive Except Japan
June 24, 2024 8:45 AM UTC
• For U.S. Treasuries we see a steady easing process from the Fed from September, which can allow 2yr yields to fall consistently. However, the decline in H2 2024 will be slower at the long-end from traditional yield curve steepening pressures and then we see fiscal stress in H1 2025 unde
June 20, 2024
U.S. Outlook: Economy Starting to Lose Momentum
June 20, 2024 6:17 PM UTC
• The U.S. economy is starting to lose momentum after a surprisingly strong second half of 2023, and we expect the loss of momentum to become more apparent in the second half of 2024, causing a slowing in employment growth from its current strong pace. We expect inflation to resume a gradua
June 18, 2024
U.S. Fed talk - Musalem and Logan hawkish, others more balanced but few sounding dovish
June 18, 2024 6:58 PM UTC
There has been plenty of Fed talk today, with Musalem, Logan and Collins sounding quite hawkish, and Williams, Barkin and Kugler more balanced. Few are sounding dovish. Even the usually dovish Goolsbee, while like several welcoming recent inflation data, made few hints about easing.
June 17, 2024
June 12, 2024
Fed: Door Still Open to 2024 Rate Cuts
June 12, 2024 7:43 PM UTC
Though the June SEP median Fed dot is for one 25bps cut in 2024, the details of the summary of economic projections and guidance from Fed chair Powell during the press conference make clear that one or two cuts are in current Fed thinking. Data dependence is key for the Fed and we look for less GD
FOMC delivers hawkish 2024 dots, but statement slightly more optimistic on inflation
June 12, 2024 6:26 PM UTC
The Fed’s statement is slightly more optimistic on inflation on June than in May, tough continues to require greater confidence that it is moving towards target before easing. The dots are significantly more hawkish than in March, with a median of only one 25bps easing in 2024 rather than three, t
June 07, 2024
FOMC Preview For June 12: Hawkish Dots, Flexible Press Conference
June 7, 2024 3:29 PM UTC
Bottom Line: The FOMC meets on June 12 and looks sure to leave the target range unchanged at 5.25%-5.50%. The tone of the statement may be influenced by the May CPI that will be released on the morning of the decision, but even if CPI surprises on the downside is unlikely to give any hints easing is
May 31, 2024
H1 2025 Fiscal Stress or Crisis?
May 31, 2024 2:30 PM UTC
We see the U.S. facing fiscal stress in H1 2025. Either a re-elected President Biden would be restrained by Republicans over raising the debt ceiling or a president Trump would want to make the lapsing parts of the 2017 tax cuts permanent. Rating agencies would be unhappy with either scenario an
May 29, 2024
May 27, 2024
Fed Easing Expectations: Volatile and Data Driven
May 27, 2024 12:05 PM UTC
Bottom Line: Fed easing expectations have been reset to higher for longer. However, softer real sector data, plus less worrying inflation monthly outcomes, can rebuild easing expectations. We see the first 25bps coming at the September 19 FOMC meeting and around this time a noticeable increase
May 22, 2024
FOMC Minutes from May 1 - Data expected to slow, but alert to risks
May 22, 2024 6:54 PM UTC
FOMC minutes from May 1 do not show a very hawkish view of the economy, with inflation and the economy still expected to slow, though with the former seen at a slower pace and with less confidence. Policy is seen as data-dependent, and the potential for a more hawkish turn if data disappoints can be
May 21, 2024
May 20, 2024
FOMC Minutes from May 1 to Suggest Restrictive for Longer
May 20, 2024 7:15 PM UTC
FOMC minutes from May 1 are due on May 22. The minutes are likely to be a more hawkish than those from the March 20 meeting released on April 10, given the strength of data released between the two meetings. Restrictive policy for longer so likely to be the message, but with no clear timetable. Soft