Insights

(Printable PDF) Noisy Data Complicates Fed Policy With a presidential election looming, geopolitical tensions escalating, and a central bank considering a major shift in its policy stance, 2024 looks to be an eventful year with a wide range of possible outcomes. So far, the financial markets are taking a “what,

(Printable PDF) No Rush to Cut Rates January tends to be an ornery month for economists, and the calendar did not disappoint this year. In the closing months of 2023, it appeared that a Goldilocks economy was unfolding, one that featured a cooling, but still solid, pace of economic activity

(Printable PDF) No Quit in This Economy 2023 ended on a high note, punctuated by sharp rallies in both the stock and bond markets, tangible evidence that the economy is on a steady disinflationary growth path, and strong indications that the Fed is poised to cut rates in 2024. The

(Printable PDF) The Case For Lower Rates The era of low rates ended in March 2022 when the Federal Reserve started the most aggressive rate-hiking campaign in a generation, lifting its policy rate 11 times from near zero to a range of 5.25-5.50 percent in July of 2023, where it

(Printable PDF) Higher Speed Limit Slows Inflation The holiday shopping season has officially kicked off, and while some have predicted a less festive Santa might have been coming down the chimney, the nation’s collective stockings will not be filled with coal. Consumers have not yet zipped up their wallets and

(Printable PDF) The Great Divide Between Feelings And Behavior The American public may not be feeling better about things, but economists clearly are. Most households think the economy is going in the wrong direction, and consumer confidence in one prominent survey is currently at recession levels. To be sure, there

(Printable PDF) Year-End Shocks and High Rates Heighten Recession Risk As expected, the Federal Reserve held rates steady at the September 19-20 policy meeting, following 11 hikes over the last 18 months that lifted short-term rates from near zero to a range of 5.25-5.50 percent. The jury is still out

(Printable PDF) The Economic Engine is Running Out of Fuel Economists are sounding ever-more like Gilda Radner of Saturday Night Live fame, claiming “never mind” about their recession call of a few months ago. What’s behind their mea culpa? Well, the economy for one thing. The drumbeat of stronger-than-expected data

(Printable PDF) Will This Time Be Different? Contrary to revised expectations – and robust economic data – the business cycle has not been repealed. Yes, a recession is coming, but it is taking an awfully long time to arrive. When it does, its shape may look different, more like a

(Printable PDF) A Pause Does Not Mean Stop As the curtain rises on the second half of the year, the economy’s growth engine is still running on most cylinders. Consumers, the main growth driver, are keeping their wallets open, jobs are still being created at a healthy pace, workers are

(Printable PDF) Why Are Economists So Glum? Economists are often called dismal scientists, as they are more likely to see the proverbial glass as half empty than half full. That label is vividly on display now, as the forecast of a recession within the economic community is more pronounced than

(Printable PDF) From One Challenge to Another While the challenges that rocked the financial markets in March have been defused, their aftereffects are rippling through the economy. We’ll have a better sense of how much credit conditions have tightened on May 8th when the Federal Reserve releases its Senior Loan

(Printable PDF) The Fed’s Direct & Indirect Effects It is a time-honored adage that monetary policy affects the economy with long and variable lags. Well, that time is up, if the tumult caused by the failure of a few regional banks is any indication. It’s important to remember that central

(Printable PDF) The Economy’s Roller Coaster Ride Continues Renewed economic vigor is upending expectations. Last year ended with a thud, with consumers retrenching, inflation receding, and financial markets slumping. Recession fears became more pronounced as did expectations the Federal Reserve would soon pause its aggressive rate-hiking campaign to prevent a

(Printable PDF) Slowing Inflation Offers Hope for 2023 Murphy’s Law played out in dramatic fashion last year, as virtually anything that could go wrong seemingly did. The pandemic morphed into a new variant; Russia’s invasion of Ukraine ignited a spike in energy, food and other commodity prices that reinforced the

(Printable PDF) Recession Ahead: Will It Be Mild Or Severe? It was a rough 2022, but the U.S. economy survived the myriad headwinds thrown at it, including raging inflation, geopolitical stress, skyrocketing interest rates, declining stock prices, a recurring COVID-19 wave, and the most aggressive pivot towards monetary tightening in

(Printable PDF) This Too Won’t Last Has the inflation worm turned? It’s still early, but the signs are encouraging as an expanding list of price measures are pointing to slower increases. Whether this favorable trend continues is an open question. Many factors underpinned the astonishing inflation cycle of the past

(Printable PDF) Slamming On the Brakes: Is a Crash Ahead? Alarms warning of a recession ring louder with each rate hike by the Federal Reserve. So far this year, there’s been plenty – five since March and still counting. Following the last three jumbo-sized 0.75 percentage point increases, the Fed’s