Dominique Dwor-Frecaut
Summary Since the 29 January FOMC, data releases have generally been towards increasing inflation risks. Transmission of Fed easing to the real economy has been unequal. Household wealth has risen but credit growth remains weak. Recent Fedspeak shows the FOMC are wondering whether policy is restrictive enough. This creates risk the Fed could end its […]
Dominique Dwor-Frecaut
Summary For all of DOGE fanfare, the Treasury daily cash balance does not show a decline in expenditures. This is because DOGE is an auditing rather than a budgeting outlet. Congress does budgeting and the current budget resolution shows fiscal consolidation is to come mainly from the faster growth engineered by the administration’s economic policies, […]
Macro Hive
Key Events G10 In the US, there is only one key data point: S&P PMIs – Friday. These are more a trading than an economic event as PMIs have decoupled from GDP. Please see our event monitor for market impact. Otherwise, this is a data-lite week. Market-moving surprises will more likely come from President Trump’s […]
Bilal Hafeez
Chris Johnson spent nearly two decades at the CIA focusing on China and Asia. Today, Chris is the President and CEO of China Strategies Group.
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 […]
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 […]
Bilal Hafeez
Jonny Matthews is a senior portfolio manager at Fortem Capital and creator of SuperMacro, an institutional-level macroeconomic research platform. Before that, he spent 12 years as a partner at Brevan Howard, where he managed a $500 million investment portfolio.
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 […]
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.
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 […]
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 […]
Macro Hive
Key Events G10 In the US, the main data points are: PCE, personal income and spending – Friday. Core PCE MoM is likely to print at 20bp, a moderate number unlikely to significantly change the Fed’s inflation views. Consensus on personal income and spending imply a low savings rate that supports continued high consumption and […]
Bilal Hafeez
Jay Pelosky is the founder of TPW Advisory. He has over 35 years of buy-side and sell-side financial market experience.
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 […]
Macro Hive
Key Events G10 In the US, these are the highlights: Inauguration – Monday. Reports suggest up to 100 day-one executive orders. Key ones include tariffs, but the incoming administration has skilfully prepared the markets and plans a gradual and predictable phase in. This could be dollar negative. S&P PMIS – Friday. These are more trading […]
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.
Bilal Hafeez
I recently gave a Harvard lecture weighing up private and public markets. You can find the slides below!
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 […]
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