Slow growth, sticky prices: a whiff of stagflation
The first-quarter economic accounts delivered an uncomfortable combination of figures that evoked unpleasant memories of 1970s stagflation.
Economy
The market gives up on rate cuts
The sovereign bond market has executed a brutal capitulation.
Three hot months: what the data now says
Macroeconomic analysts who dismissed January’s hot inflation figures as seasonal noise have run out of statistical excuses.
Powell admits cuts will take longer
Jerome Powell completed a significant rhetorical retreat on 16 April, officially acknowledging what bond markets had been pricing for weeks: that persistent inflation will delay prospective interest rate cuts.
Immigration changes the jobs maths
The March employment report delivered another blowout figure, with non-farm payrolls expanding by 303,000 jobs and unemployment ticking down to 3.8 per cent.
Inflation's stall isn't a seasonal fluke
Financial commentators spent the opening months of 2024 attributing sticky inflation prints to residual January seasonal noise and contract resetting quirks.
The Fed nudges its long-run rate higher
The Federal Open Market Committee held its policy rate steady at 5.25–5.50 per cent in March, but quantitative analysts focused intently on a subtle adjustment in the Summary of Economic Projections.
Japan ends negative rates
In a historic policy shift on 19 March, the Bank of Japan officially terminated seventeen years of unconventional monetary experimentation.
The Fed's banking lifeline expires
On 11 March, the Federal Reserve officially ceased issuing new loans under the Bank Term Funding Program (BTFP), terminating the emergency lending facility launched during the regional banking panic of 2023.
Why job numbers keep getting revised down
Macroeconomic forecasters have noticed a troubling pattern in the Bureau of Labor Statistics’ monthly payroll releases: initial blockbuster figures are routinely followed by substantial downward revisions.
The new normal for interest rates is higher
The Federal Reserve’s Summary of Economic Projections has quietly begun an analytical retreat from the era of secular stagnation.
Japan and Britain slip into recession
Official fourth-quarter national accounts confirmed that two of the world's leading industrialized economies—Japan and the United Kingdom—slipped into technical recession in late 2023.
A hot inflation report hits short-term bonds
Fixed-income bulls received a rude awakening from the January consumer price index, as headline inflation printed at 3.1 per cent and core prices surged by an uncomfortably hot 0.4 per cent month-on-month.
Special Report
Lunar New Year: China's stock market can't escape falling prices
As China enters the Year of the Dragon, domestic equity markets are finding little reason for celebratory animal spirits.
Did inflation's progress survive the revisions?
Fixed-income markets held their breath on 9 February as the Bureau of Labor Statistics released its annual benchmark revisions to the consumer price index.
353,000 jobs and no March cut
The January employment report delivered an absolute shock to the macro consensus, as non-farm payrolls surged by an eye-watering 353,000 jobs, while December’s figures were revised sharply higher.
3.3% growth: too good to be true?
The US economy capped 2023 with a spectacular flourish, expanding at an annualized clip of 3.3 per cent in the fourth quarter and utterly pulverizing consensus expectations of a slowdown.
Japan wants pay rises before rate rises
The Bank of Japan held its benchmark policy rate steady at minus 0.1 per cent in January, disappointing traders anticipating an immediate end to negative interest rates.
Banks borrow from the Fed to earn more from the Fed
In the quiet corners of central bank plumbing, a lucrative arbitrage trade has flourished.
Why January inflation always looks bad
Financial markets have an unfortunate habit of overreacting to January inflation prints.
Shipping costs double as ships avoid the Red Sea
The commercial consequences of the Red Sea shipping crisis are accelerating through global trade lanes.
The Fed's money drain is about to get real
The Federal Reserve’s quantitative tightening (QT) programme has operated quietly in the background, absorbing nearly $1 trillion in sovereign and mortgage debt without disrupting financial plumbing.
Special Report
New Year: Markets want six rate cuts. They'll be disappointed
Wall Street enters 2024 in a state of euphoric anticipation, with forward markets pricing in six quarter-point interest rate reductions beginning as early as March.
2023: The recession that never came
As 2023 draws to a close, economists and macroeconomic forecasters must confront a humbling reality: the universal recession call that dominated market consensus twelve months ago was spectacularly wrong.
Red Sea attacks threaten cheaper goods
Houthi missile and drone strikes against commercial maritime shipping in the Bab el-Mandeb strait have forced global shipping giants, led by Maersk, to pause Red Sea transits.
The Fed pivots
Jerome Powell completed his historic rhetorical pivot at the December FOMC meeting, handing financial markets an early holiday gift.
Can the Fed really cut six times?
Financial markets have fully embraced the fantasy of an immaculate macroeconomic landing.
Inflation is already at target, if you squint
Disinflation has arrived, but its precise velocity depends on which statistical lens an analyst chooses to apply.
A Fed hawk hints at cuts
When Christopher Waller speaks, monetary markets listen with rapt attention.
Special Report
Cyber Monday: Record spending on borrowed money
Cyber Monday set a staggering new record, with American online shoppers racking up $12.4 billion in purchases in twenty-four hours.
Inflation hits 3.2%. The last mile begins
The October consumer price index provided welcome relief to equity bulls, with headline inflation dropping to 3.2 per cent and core prices advancing at their slowest annual pace in two years.
Special Report
Diwali: India's festive boom runs on credit
As millions celebrated Diwali across India, cash registers rang to the sound of an unprecedented consumer spending boom.
Special Report
Singles' Day: China's shoppers have lost their nerve
China’s annual Singles’ Day shopping extravaganza has long served as a glittering showcase of consumer animal spirits and domestic consumption growth.
The recession rule that's flashing amber
Macroeconomic forecasting is littered with flawed empirical heuristics, but the Sahm Rule has earned a near-sacred reputation among monetary economists.
Strong jobs, falling bonds
The September employment report delivered an absolute blowout, with non-farm payrolls expanding by an astonishing 336,000 jobs—nearly double consensus forecasts.
The Fed takes back half its rate cuts
The Federal Open Market Committee's September meeting delivered an unmistakable hawkish message wrapped in a neutral policy hold.
Is "higher for longer" already priced in?
Equity markets spent the summer pricing in a benign 'goldilocks' scenario, where inflation fades painlessly and central banks embark on an orderly cycle of monetary easing.
Unemployment rose, for a good reason
When the headline unemployment rate climbed from 3.5 to 3.8 per cent in August, knee-jerk commentary warned of cyclical deterioration.
Saudi Arabia keeps oil above $90
Riyadh has re-established itself as the undisputed price-maker of the global energy market.
Special Report
Labor Day: The job market is cooling the right way
For eighteen months, monetary orthodoxy insisted that cooling inflation required engineering a painful surge in unemployment.
Bonds finally pay more than inflation
The sovereign bond market has crossed a monumental psychological threshold.
Economists can't agree on where rates should settle
The annual Jackson Hole symposium has exposed the deep intellectual fractures dividing monetary theorists.
America is borrowing like it's in a recession. It isn't
Running substantial fiscal deficits during severe economic contractions is standard Keynesian doctrine: automatic stabilizers kick in, tax receipts fall, and public spending cushions the decline.
Is the economy really this strong?
On paper, the American macroeconomic juggernaut appears unstoppable.
One more hike, then what?
With futures markets pricing an overwhelming ninety-eight per cent probability of a quarter-point rate increase at the July FOMC meeting, the outcome of the policy decision is a foregone conclusion.
Inflation hits 3%. The easy part is over
When headline US consumer price inflation dropped to 3.0 per cent in June, financial commentators rushed to declare the war on inflation won.
Inflation is falling without a recession. Can it last?
Macroeconomic optimists have found their gospel in the recent deceleration of consumer price inflation.
Special Report
Prime Day: What Amazon's discounts say about inflation
Amazon’s annual Prime Day has grown into an informal gauge of American consumer resilience and retail pricing dynamics.
The stubborn inflation the Fed can't shake
For Federal Reserve officials scanning the inflationary horizon, the persistent stickiness of core services is becoming an analytical obsession.
