The U.S. takes the policy road less traveled
The difference between U.S. and European economic growth trajectories may come down to policy paths taken or not taken.
Category: Macroeconomics
Fed weighs addition to policy toolbox
The Fed may have a desire to switch to a different monetary-policy regime, one that would involve using a permanent balance sheet.
In rising economy, wages are a wild card
By the end of the first quarter, U.S. economic data began to improve somewhat from what had been winter-related economic weakness. After disappointing results from various sectors of the U.S. economy, higher auto sales, improving business activity, and overall job creation that is generally in line with forecasts have helped shape expectations for a comparatively
Is the Fed fighting the last war?
In recent posts, we have approached the problem of the outlook for interest rates by outlining the questions that surround the potential growth rate of the U.S. economy. It is established that this rate is heavily influenced by conditions in the labor market. New workers are joining the labor force at a slower pace than
How yields can change in a “normalizing” economy
As the Federal Reserve plots its actions and communications strategy for the gradual normalization of monetary policy, fixed-income investors face the challenge of anticipating the future course of interest rates. Economic growth influences interest rates The long-term “equilibrium” interest rate of an economy is intimately linked to the economy’s overall growth potential when it is
Warming economy may leave bond index cold
It appears likely that the U.S. economy will continue to improve, keeping interest rates elevated and volatile. The U.S. recovery, despite higher taxes, generally rising interest rates, and broad-based budget cuts enforced by the federal sequester, appeared to remain on track through the second quarter, and we see the United States maintaining this course in
New home sales shine in U.S. recovery
Based on its internal dynamics, the U.S. economy continues to be one of the most attractive for investors. One of the key pillars of support for the U.S. economy has been the housing market. Dynamics of the housing market include low prices, low mortgage rates, high pent-up demand due to rising household formation, and institutional
Mixed data may hint at economic slowdown
While the U.S. economy merits a degree of optimism, as the recovering housing sector has supported improvement in the labor market and consumer spending, we question the outlook for the balance of 2013. A key indicator in our research reveals that expectations are getting ahead of themselves. The Economic Surprise Index measures the difference between
Sequester will take a small bite from GDP
With the automatic spending cuts, or sequestration, required by the Budget Control Act of 2011 still on track to go into effect starting Friday, March 1, we believe it’s important to keep the full impact in perspective. Even if we do go into a sequestration mode in the United States, or get bogged down in