Personal income, spending, and savings data revisions were released last week. This update changed the level of consumer income meaningfully, resulting in higher y/y growth rates on a nominal and inflation-adjusted basis. Notably, spending data featured smaller upward revisions than income, leaving the personal saving rate much higher than what had initially been published. We...Read More

With 41 days until the U.S. Presidential election and 43 days until the next FOMC meeting, we are expecting conversations around those outcomes to become a larger focus for investors. To help navigate the noise, we thought it would be helpful to lay out the upcoming economic and earnings calendar. Ultimately, the point of this...Read More

At their September 18th meeting, the FOMC cut its Federal Funds Target Rate by 50 basis points. Looking ahead, the Fed Funds futures market expects an additional 200 basis points of rate cuts by the end of 2025. Our view has been that those expectations are aggressive, especially in the near term, given the inflation...Read More

As of yesterday, Fed Funds futures were pricing in roughly six 25-basis point rate cuts by January 2025 and ten 25-basis point rate cuts by October 2025. That pace has been, at least in part, influenced by an overreaction to slowing payroll growth. While hiring has certainly slowed, in our view it is more likely...Read More

The Euro Area flash estimate for its Harmonised Index of Consumer Prices (HICP) decelerated to 2.18% y/y in August from 2.58% in the prior month. HICP Overall, excluding Energy, accelerated to 2.75% y/y from 2.72%. The takeaway from those two series is that headline inflation did not get below the ECB target and consumer items...Read More

The Fed Funds futures market is currently expecting the start of a prolonged rate-cutting cycle beginning next month. While the highest probability points toward a Fed rate cut at the September meeting, the outlook for continuous rate cuts by the magnitude the market currently expects appears less certain. To map this, out we can look...Read More

Last week we received updates from two quarterly credit-related releases from the Federal Reserve Senior Loan Officer Opinion Survey (SLOOS) and the FRBNY Household Debt and Credit Report. Credit growth is the foundation of real economic activity which is why we have been monitoring the space closely for signs of rate of change improvements. For...Read More

The last week of data offered some turbulence across economic indicators and market signals that brought the word “recession” back into the mix. Investors have been digesting softer payrolls, higher unemployment, heighted foreign exchange volatility, falling government bond yields, rising rate cut expectations, a small cap equity correction, and several household mega cap stocks down...Read More

Trends in the housing market can have near-term impacts on economic outcomes given all the activity related to transaction volume. Additionally, we believe the current inventory/price dynamics could likely lead to a reacceleration of the shelter component in CPI, which may cause further uncertainty around the pace and amount of FOMC rate cuts as we...Read More

China’s economic setup has broad implications for global economic activity, and ultimately that global dynamic may influence the trajectory of U.S. economic activity. Chinese real GDP growth slowed to 4.7% y/y in 2Q24 from 5.3% in the prior quarter. Underneath the headline number, Services decelerated the most on a rate of change basis from 5.0%...Read More