The FOMC delivered a widely anticipated 25bp cut today, lowering the target range to 3.5–3.75%. The meeting featured a three-way split in dissents—two hawkish and one dovish—perfectly mirroring consensus expectations. While the “dot plot” remained largely unchanged from September, the overarching message from the statement and Chair Powell’s press conference was clear: the era of …
• Real GDP rose 4.3%q/q, saar in 3Q, the strongest increase in two years • Strong growth reflected a pickup in consumer spending as well as robust capex and government spending on defense • Core PCE inflation rose 2.9%q/q, saar; the GDP price index jumped 3.8% • October-November IP data show growth in manufacturing moderating • Further deterioration in Conference …
The simultaneous release of the November and partial October employment reports could have been a source of significant volatility, but the data ultimately failed to shift the labor market narrative established prior to the government shutdown. Private payrolls grew by 52,000 in October and 69,000 in November, hovering remarkably close to the three- and six-month …
Pending home sales—a reliable leading indicator for existing home turnover with a one-to-two-month lead time—surged 3.3% in November, catapulting the index to its highest level since February 2023. This print is particularly impressive given that average mortgage rates actually drifted 10bp higher during the month, and it follows a robust, upwardly revised 2.4% gain in …
Pending home sales climb higher amid rate relief Read More »
As we look toward next week’s December employment report, we must critically evaluate the distortions that defined the November unemployment rate. While the headline figure rose 12.5bp between September and November—seemingly providing clear evidence that unemployment was breaking out of its established mid-2024 range—our forensic analysis suggests this move was heavily polluted. We estimate that …
On August 1, the US increased the reciprocal tariff on imports from Türkiye to 15%, up from 10%. Since March 2018, the US has imposed a 25% tariff on steel and aluminium imports from Türkiye,so that tariff is not new for the country, unlike the rest of the world. The US also announced a 25% …
Türkiye’s trade and US tariffs: Much ado about little Read More »
Last week the White House announced there will be a new $100,000 H1-B visa fee for the next 12 months. It will apply only to visas for new employment, in a speciality occupation, for a worker currently outside the US. It does not apply to H1-B renewals, which we interpret to include extensions at an …
Last week the CBO released new demographic forecasts, updating their January estimates to account for changes in immigration policy. The population forecast for 2025 was cut from 0.7% to 0.2%, entirely accounted for by lower net immigration, which now contributes 0.1%. There were also smaller reductions to future years. It was well understood that there …
The minutes to the September 16-17 FOMC meeting highlighted the Committee’s lingering inflation concerns, even as it voted to cut rates to better manage risks. In particular, the minutes note that “downside risks to employment had increased over the intermeeting period and that upside risks to inflation had either diminished or not increased.” While most …
Inflation worries linger at the Fed, even as it cuts rates Read More »
The federal government shut down on October 1. In past research we’ve noted that the economic effects of shutdowns tend to be minor. Most shutdowns are very short-lived, though recent episodes include a 17-day shutdown in Oct 2013 and a record 35-day shutdown in Dec 2018-Jan 2019. The 2013 shutdown is more comparable, as no …
