Fed

Is the U.S. budget deficit sustainable?

The U.S. federal budget deficit for 2018 came in just shy of $800 billion, or about 4% of the gross domestic product (the primary deficit, which excludes the interest expense of the debt, was about 3% of GDP).As the figure above shows, the present level of deficit spending (as a ratio of GDP) is not ...

Schedule for Week of May 26, 2019

The key reports this week are the second estimate of Q1 GDP, Case-Shiller house prices, and Personal Income and Outlays for April.For manufacturing, the May Dallas and Richmond Fed manufacturing surveys will be released.----- Monday, May 27th ----- All US markets will be closed in observance of Memo ...

Double Whammy: Fed Policy and the U.S.-China Trade War

May’s “flash” index of U.S. manufacturers registered a sharp decline to 50.6. This is only a preliminary reading, but if it turns out to be accurate, it would mark the slowest growth in the domestic manufacturing industry since September 2009 ...

May’s Resignation means Brexit is Back to Square One

One word perfectly sums up the events of this week. Disappointing.  For some it began with the uninspiring conclusion of Game of Thrones, long-term stock investors grimaced at the lack of progress with the US-China trade war, and FX traders will see the British pound remain in limbo after Prime Mi ...

Q2 GDP Forecasts: Mid 1% Range

From Merrill Lynch: We lowered 2Q GDP tracking by 0.2pp to 1.6%, while 1Q remained unchanged at 2.9% [May 24 estimate]emphasis added From Goldman Sachs: We lowered our Q2 GDP tracking estimate by two tenths to +1.3% and our past-quarter GDP tracking estimate for Q1 by one tenth to +3.0% (qoq ar). [U ...

Durably Terrible

By TF 21 Comments | 5 Likes The US economy continues to rapidly deteriorate as shown by yesterday's PMIs and today's Durable Goods report. The bond market shows this, as well, and now the "stock market" is struggling, too. That this is all leading to multiple fed funds rate cuts and a resumption ...

A Fed Rate Cut Looks Unlikely This Year. Here's Why.

Is the market-implied probability of a U.S. Federal Reserve (the Fed) rate cut later this year overblown? Our answer: Yes. ...

USD/JPY – Investor angst boosts safe-haven yen

USD/JPY is almost unchanged on Friday. In the North American session, the pair is trading at 109.60, up 0.01% on the day. On the release front, Japanese National Core CPI improved to 0.9%, matching the forecast. The All Industries Activity indicator declined 0.4%, marking a fifth successive decline ...

Treasury Inflation Expectations Dive As US Yield Curve Inverts

The Treasury market’s outlook has turned grim, based on the inverted yield curve of late. Another dimension of the cautious outlook is yesterday’s sharp drop in the implied inflation outlook, based on yield spreads for nominal less inflation-indexed Treasury rates. Let’s start with the yiel ...

EUR/USD – Euro subdued in light-data session

EUR/USD has paused on Friday, after gaining ground on Thursday. Currently, the pair is trading at 1.1193, up 0.10% on the day. There are no German or eurozone events on the schedule. Today’s highlight is U.S. durable goods orders, with the markets braced for soft numbers. Durable goods orders is ...