During the December FOMC meeting, the committee updated its projections for monetary policy which suggested three rate cuts were a possibility in 2024. At that time, the market’s expectations for rate cuts indicated six to seven rate cuts were a possibility this year with the first rate cut most likely occurring in March. Over the...Read More

From a high level, we monitor the manufacturing sector for what it can tell us about broader economic activity. In periods where real economic activity is accelerating, we would expect to see accelerating growth in new orders, shipments, and inventories. In the January manufacturing report from the U.S. Census Bureau, new orders, shipments, and inventories...Read More

We have been highlighting the recent rate of change acceleration in several macroeconomic indicators and the rising probability that this could continue in coming months given the easing y/y base effects. While this is a sign of an improving economic setup, we will also be looking for a parallel acceleration in lending activity. Ultimately, credit...Read More

Over the last few weeks, small caps, Bitcoin, oil, and other market-based measures have moved higher alongside rising U.S. Treasury yields. The direction of these market signals, collectively, likely suggests expectations for growth and inflation are improving. Source: Koyfin.  If real economic activity were to accelerate, we would expect to see a continuation of the...Read More

Over the last few weeks, we have been trying to frame up the comparison set for growth and inflation as we move through the first half of 2024. One of the goals of this is to get an idea of the economic environment that central bank policymakers will be operating in when target interest rate...Read More

The Consumer Price Index decelerated to 3.1% y/y in January but remains above the Federal Reserve’s target level of inflation. Critically, as the y/y comparison set eases, there will be less downward pressure on the headline growth rate from a mathematical standpoint. To get CPI below 2.0% by the June FOMC meeting (May CPI will...Read More

The Household Debt and Credit Report from the FRBNY for the fourth quarter of 2023 was released yesterday. Total household debt increased by $212 billion to $17.50 trillion, driven by a $112 billion increase in mortgage debt, a $50 billion increase in credit card debt, and a $50 billion increase from all other categories combined....Read More

With earnings season well under way, we have been focused on consumer-oriented financial institutions to provide insight into the consumer setup. The read-through on currently available data suggests consumers’ inability to pay down card balances has increased which could lead to a slowdown in consumer spending. The table below highlights the sequential increases in credit...Read More

Last week we received an update on industrial production, which accelerated to 0.98% y/y in December, its first positive print since August. However, it is important to note the easing base effects from November into December of last year that played a significant role in the most recent y/y acceleration. The comparison set moved from...Read More

Given the increase in market expectations for rate cuts to begin in March, we will be focused on the economic condition set that would likely need to be met to justify Fed rate cuts based on measures they have indicated are important to their policy decisions. Last week we received an update on the Consumer...Read More