Subscribe

Monetary Policy & Inflationsee more…

  1. Inflation Monitor: Still High, Still Sticky

    Dominique Dwor-Frecaut

    Summary January’s CPI upside surprise did not change my big picture inflation view, stuck at about 1ppt above the Fed’s 2% target. Market and survey-based inflation expectations continued rising in January. Inflation trends remained stable and high. Evidence of cost pressures rose with unit labour costs increasing. Domestic demand pressures are raising inflation, though this […]

  2. Labour Market Monitor: Faster Wage Growth, Slower Productivity

    Dominique Dwor-Frecaut

    Summary Nonfarm payrolls (NFPs) were lower than expected but an upward revision to December made up for the shortfall. Overall, the past month’s data still indicates strong labour demand and further labour market tightening. Annual data revisions provided a one-time statistical lift to labour supply, but the underlying fundamentals remain weak. Wage growth has been […]

  3. BoE Review: 25bp Cut, Strong Scope for CPI Undershoot vs MPR

    Henry Occleston

    Summary The BoE cut 25bp, as expected. MPR forecasts were bearish, and comments still indicate more cuts ahead. I read little into the two 50bp votes. Upward revisions to MPR near-term inflation forecasts exceeded our expectations, with smaller impact from one-offs than we anticipate. Despite labour market loosening, medium-term inflation is below target but still […]

  1. Higher Tariffs Are Here to Stay

    Dominique Dwor-Frecaut

    Summary Tariff increases are likely to proceed on two tracks. The long-term track is broad based, gradual and meant to generate revenues and support reshoring. Meanwhile, the ‘opportunistic’ track is country specific, aggressive and meant to exert leverage on trade partners. The ongoing ‘opportunistic’ tariff increase has created new policy uncertainty and delayed this year’s […]

  2. BoE Preview: 25bp Cut, Dovish MPR to Set Tone for Further Easing

    Henry Occleston

    Summary We expect the BoE will cut rates by 25bp this week, with an 8:1 vote split. The updated MPR projections will likely be much more bearish on the labour market and GDP, despite strong wage growth. Along with updated supply-side analysis, this should see inflation undershooting target by even more in the medium term […]

  3. Ep. 253: Barry Eichengreen on Trump Trade Policy, Dollar Status and Debt Crises

    Bilal Hafeez

    Barry Eichengreen, Professor of Economics and Political Science at the University of California, Berkeley, is a former senior policy adviser at the International Monetary Fund.

FOMC Review: Unchanged Outlook

Dominique Dwor-Frecaut

Summary The Fed held rates as expected with its economic assessment and policy outlook unchanged, though a lack of details on the Trump administration’s policies has created unusual uncertainty. Chair Jerome Powell expects the immigration decline to continue and lead to a combination of lower job creation and continued labour market balance. Powell’s presser and […]

Powell’s Presser: Preview and Scenario Analysis

4 researchers

Market Pricing The market is pricing a 29% probability of a Fed cut in March and two cuts by 2025. UST Market Technicals A fortnight ago, our US Rates Technical Report (USRTR) showed technicals across the curve were oversold in all the UST futures contracts. Yesterday’s USRTR showed technicals are now a lot cleaner than […]

  1. FOMC Preview: A Wait and See Hold

    Dominique Dwor-Frecaut

    Summary The Fed will likely hold rates steady next week as inflation and growth remain stable and high. It will have too little information on the Trump administration’s economic program to assess the impact on policy. Market Implications I still expect no cut in 2025 against markets pricing about 1.5 cuts. Stable and High Inflation […]

  2. Ep. 251: Phil Suttle on Fed Hiking in 2025

    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.

  3. US Inflation Monitor: Upside Risks Persist Despite Negative CPI Surprise

    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. […]

Quick Take: Reserves Bonanza Will Not Last

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 […]

Ep. 250: Dominique Dwor-Frecaut on Non-Consensus View on Fed and Trump 2.0

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.

  1. Quick Take: Los Angeles Fires Highlight Upside Inflation Risks

    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 […]

  2. US Labour Market Tighter Than Appears

    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). […]

  3. FOMC Review: A New Phase

    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 […]

Quick Take: Reviewing the New RBA Board Structure

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 […]

Quick Take: SNB Cuts 50bps, Risk to Dovish Theme

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. […]

View all articles in "Monetary Policy & Inflation"…

Subscribe to Macro Hive

Macro Hive is the community platform for the thinking investor…

START 30-DAY FREE TRIAL

Already have an account?…

Log in…

Get the weekly newsletter 16,000+ finance pros read for 'must-have' trade ideas.

    Spring sale - Prime Membership only £3 for 3 months! Get trade ideas and macro insights now