The Q3 earnings season will shift into high gear this Friday as banks report their financial results for the quarter. Among the trends that we’ll be watching for is insight on the outlook for profit margins. As our US…
Results of the New York Fed’s survey show American consumers’ near-term inflation outlook ticked up in September. Respondents’ one-year ahead inflation expectations rose from 3.6% to 3.7%, and the three-year…
Households’ excess pandemic savings will eventually run out, but we continue to disagree with the widespread view that they’re already gone or entirely in the hands of the wealthy. Consumers’ demise continues to be greatly…
The Citi US Inflation Surprise Index has risen over the past two months after having bottomed at a three-year low in July. The good news is that the level of the index remains negative after having first fallen below zero in…
Aggressive monetary tightening has always led to recession, although the timing is uncertain. The effects of high interest rates are starting to be felt. Investors should stay risk off and buy government bonds as a safe haven…
The consumption rotation from goods to services has been one of the drivers of the global manufacturing downturn. Demand for durable goods normalized after the pandemic binge. Meanwhile, consumption of services benefitted from…
In Section I, we note that the recent surge in long-maturity government bond yields is symptomatic of a sharp reduction in market expectations for a soft-landing economic outcome. This underscores that the US and other developed…
Financial conditions tightened meaningfully in the first three quarters of 2022 as market participants anticipated an aggressive monetary tightening cycle. However, this tightening phase ended in late-2022. Indeed, economic…
The Conference Board’s Consumer Survey results delivered a negative signal about the US consumption outlook on Tuesday. Although the present situation component inched up marginally in September, a 9.6-point drop in the…