Are We Headed for an Economic ‘Rapid Unplanned Disassembly’?
Callan analyst examines the state of the U.S. economy and the prospects for a soft landing.
PCE and CPI: What’s the Difference?
Fanglue Zhou explains how CPI and PCE differ and why the Fed prefers the PCE.
Cautiously Optimistic Forecast on the Economy, Tempered by Clouds
Kristin Bradbury analyzes the U.S. economy in 4Q21 and the macroeconomic outlook for 2022.
How the Fed’s COVID-19 Programs Affected Markets and Investors
Since the start of the COVID-19 pandemic in March, financial markets have experienced levels of disruption not seen since the Global Financial Crisis of 2008. After bid-ask spreads widened dramatically in March across a broad array of fixed income sectors—including off-the-run U.S. Treasuries!—a series of Federal Reserve programs has restored investor confidence and liquidity, and […]
The Fed Speaks: ‘A Mid-Cycle Adjustment to Policy’
The U.S. economy continued its now-record expansion in the second quarter with a 2.1% gain in GDP, slower than the robust 3.1% in the first quarter but well ahead of expectations. Consumer spending rose 4.3% in the quarter, supported by solid gains in the job market and disposable income growth of 5% in each of […]
Fed Sends Strong Message, but More Needed
On Sunday, the U.S. Federal Reserve announced several measures intended to provide liquidity and restore confidence in the markets: An emergency rate cut: Fed Funds Rate was cut 100 bps to 0.00% to 0.25%. The Fed is committed to keeping rates at the zero lower bound until “it is confident that the economy has weathered […]
Why Is Inflation So Low?
View PDF We are now eight years into the economic recovery in the U.S., arguably the latter stages of a mature expansion and at a point where inflationary pressures typically begin to build. Yet price and wage inflation remain stubbornly subdued. Headline and particularly core inflation have drifted down over the past several months. Headline […]
Over-Inflated? PCE vs. CPI
Because of its extraordinary response to the Global Financial Crisis, investors scrutinize the actions of the Federal Open Market Committee (FOMC) more than ever. Since 2000, the Fed’s preferred measure to set its 2% target rate for inflation has been the personal consumption expenditures (PCE) index. Despite these developments, the consumer price index (CPI) remains […]
(No) News at 11:00 – Fed Raises Interest Rates
Yesterday, the Federal Reserve raised short-term interest rates in the U.S. by 25 basis points, or one-quarter of a percent. Fed Chair Janet Yellen said, “the simple message is that the economy is doing well.” The Fed’s announcement was likely the most widely telegraphed and fully expected policy move in its history. The stock market […]