Monetary Policy
August’s 0.3% increase in core CPI breaks inflation’s 3-month downtrend and is likely hot enough for the Fed to hike rates when it meets next week.
The August PPI report showed a renewed cost-push inflation impulse, but there is still little evidence of second-round effects. Headline PPI for final demand rose 0.4% m/m, in line with estimates and up from an upwardly revised 0.1% in July, lifting the…
The ECB hiked rates by 25 bps to 2.50%, but the supply-driven nature of inflation should limit how far tightening extends into restrictive territory. This was the second hike since the Iran war began in February, leaving the deposit rate at the upper end of…
Sweden’s August inflation miss reverses July's core spike, strengthening the case for fading Riksbank tightening. CPIF held at 0.7% y/y, below the 0.9% consensus, while CPIF excluding energy eased from 0.6% to 0.5%, undershooting the 0.7% consensus and…
Australia's August NAB Business Survey points to a cooling economy and supports an on-hold RBA. Business conditions turned negative for the first time since 2020, falling to -1 from 4 and well below the long-term average. Profits and sales dropped to their…
Fed Governor Waller signaled that the September FOMC decision hinges on August inflation data, with continued disinflation favoring a hold. Waller said he is inclined to keep rates unchanged if disinflation continues, arguing against hiking while inflation is…
The Bank of Canada held rates at 2.25%, with two-sided stagflationary risks returning but the BoC tilting slightly more toward upside inflation risks than downside growth risks. The overnight rate remains at the bottom of the BoC’s estimated neutral range…
Fed Chairman Warsh used his first Jackson Hole speech to reset his communications approach, laying out a reaction function broadly in line with the rest of the FOMC. After mixed reviews of the first two Fed meetings under his leadership, Warsh delivered a…
Core PCE inflation is likely to move lower as the extreme price moves driving its gap with CPI fade, limiting the need for additional Fed tightening. Our Chart Of The Week comes from Ryan Swift, Chief US Bond Strategist, who investigated the gap that has…
Our Portfolio Construction strategists estimate a US 60/40 portfolio will return 6.9% annualized over the next 10-to-15 years, with a Global 60/40 at 7.0% for hedged USD investors. In real terms, those translate to 4.4% and 4.6%. The Global 60/40 assumption…