Bilal Hafeez
Phil is the founder of Suttle Economics – a leading research consultancy. Before that, he held senior roles at Tudor, the Institute of International Finance (IIF), JP Morgan, Barclays, the New York Fed and World Bank.
Dominique Dwor-Frecaut
Summary Despite the downside surprise in December’s core CPI, inflation risks are tilted to the upside: Survey based inflation expectations are rising or stable but high. Inflation trends are stable and high. Evidence exists of cost pressures. Domestic demand pressures are pulling up inflation, though this seems offset, so far, by weak worker bargaining power. […]
Dominique Dwor-Frecaut
Summary Relative to end-2024, banks reserves are up about $100bn. This reflects the reinstatement of the debt ceiling on 1 January, which forces the Treasury to run down its balance at the Treasury to fund the deficit. The reserves increase likely will not last as January tends to be a cash surplus month for the […]
Bilal Hafeez
Dominique Dwor-Frecaut is the Chief US economist and macro strategist for Macro Hive and is based in Los Angeles. Before that, she worked at various hedge funds including Bridgewater.
Dominique Dwor-Frecaut
Summary Ongoing Los Angeles (LA) fires are causing large-scale destruction of housing, infrastructure and production assets, with uncertain and costly reconstruction. The fires highlight the impact of climate change as a negative supply shock and cast doubts on the Fed’s hopes that above target services inflation can be offset with below target goods inflation. Market […]
Dominique Dwor-Frecaut
Summary Net hiring, a better indicator of labour market tightness than hiring or quit rates, remains at the average of 2019. The unemployment increase reflects labour market normalization and a surge in migrants, who take longer to find a job. The recent employment growth slowdown likely reflects a slower increase in migrants (i.e., labour supply). […]
Dominique Dwor-Frecaut
Summary The Fed eased as expected but communicated a shallower trajectory for the Federal Funds Rate (FFR) with only two 2025 cuts. Jerome Powell stressed the Fed was entering a new phase: with the FFR close enough to its neutral value, actual disinflation progress would be required for further FFR cuts. Market Implications I still […]
Ben Ford
Summary Having passed the federal government’s long-delayed amendments to the Reserve Bank Act back in November, Treasurer Chalmers has delivered the composition of the two new RBA boards. Two new members will join the Monetary Policy Board: Renée Fry-McKibbin and Marnie Baker. Four current board members will transition to the board. The new MPB will […]
Ben Ford
Summary The SNB cut the policy rate by 50bps, to 0.5%. That was their fourth cut of the cycle, but their first 50bp reduction since January 2015. Underlying inflation pressures are weakening with growth proving modest. The unemployment rate is grinding higher, too. In culmination, it led to a lower inflation forecast in the near-term. […]
Dominique Dwor-Frecaut
Summary CPI was in line with expectations. Goods deflation stopped, shelter slowed and supercore inflation accelerated somewhat. Trend measures show inflation is becoming stickier. Market Implications I continue to expect the Fed to cut 25bp in December, in line with markets pricing 95% risk. I expect the Fed to remain on hold in 2025, against […]
Dominique Dwor-Frecaut
Summary The Fed is likely to cut next week despite disinflation stalling as it believes policy is still restrictive and risks to the mandate are balanced. The SEP is likely to show two 2025 cuts next year due to: Recently slower progress on inflation. Risks of higher R*. Uncertainty on the incoming Donald Trump administration. […]
Dominique Dwor-Frecaut
Summary We still know little about the incoming Donald Trump administration’s key policies, budget deficit, tariffs and immigration. Key economic nominees so far suggest a focus on both market performance and median household income growth. These need not conflict if growth remains high enough, but we need information to assess whether this is a realistic […]
Dominique Dwor-Frecaut
Summary NFP printed 227k, roughly in line with consensus of 220k. This was more than the 150k I expected but does not change my expectations of a medium-term decline in NFP to about 50k. The labour market remained tight and wage growth stuck at 4% but the ongoing productivity acceleration makes this consistent with 2% […]
Henry Occleston
Summary We expect the ECB to cut 25bp on 12 December. It will also update macroeconomic projections, which are likely to see dovish revisions with inflation sustainably at target in H1 2025. We expect the ECB to avoid fully opening the way to 50bp cuts, but comments will likely add that they are flexible to […]
Dominique Dwor-Frecaut
Summary Fed Chair Jerome Powell has signalled he intends to keep inflation within its current range. He likely intends to implement opportunistic disinflation, a Fed strategy from the 1990s that relies on disinflationary shocks to lower inflation. But today’s macro backdrop is less favourable compared with the 1990s, suggesting the desired disinflationary shocks may not […]
Macro Hive
Key Events G10 In the US, these are the key data prints: Personal income, spending and PCE – Friday. No surprise on core PCE, Powell has already told us that the Fed expects 2.8% YoY. Consensus forecasts on spending and income imply no real increase, which aligns with my expectations of slower consumption growth in […]
Henry Occleston
Summary ECB voters have started discussing where R* is. But there is little appetite right now in discussing cutting below the neutral rate. We estimate consensus R* is around 2-2.5%, making the market pricing (1.70% in October 2025) look overly dovish. The US election outcome has driven some of this. It probably underestimates the reality […]
Bilal Hafeez
Charles Engel is Donald Hester Professor of Economics at the University of Wisconsin. He is also a Research Associate at the National Bureau of Economic Research.
Dominique Dwor-Frecaut
Summary Recent NFP prints and pre-pandemic CBO projections suggest sub-100k NFPs could be the new normal now the immigration surge is over. If so, a large negative surprise at the 6 December NFP release is likely, which would rekindle recessions fears and expectations of Fed cuts. I expect the Fed to respond with a cut […]
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