Nordea with the note: We warned back in September how lockdowns would become relevant again within a matter of months despite right about every politician declaring victory against Covid-19. We currently see targeted measures against those who remain unvaccinated across Europe to combat “the pandemic of the unvaccinated”, but these measures are very unlikely to work wonders
BofA with the note: In the late-1960s, Arthur Okun created a simple statistic to capture the cost of stagflation. His“misery index” simply added the unemployment rate to headline inflation. Over time the index dropped off the radar screen, but it may be time for a comeback. Tomorrow both we and the consensus expect year-over-year CPI
The Fed’s GDPNow is hurtling off a cliff: The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2021 is 0.5 percent on October 19, down from 1.2 percent on October 15. After recent releases from the US Census Bureau and the Federal Reserve Board of Governors, the nowcasts of third-quarter
BofA talks us through it: Rents surge pointing to stronger persistent inflationCore CPI rose 0.24% mom in September, bouncing back from the 0.1%rise in August. This kept the % yoy rate steady at 4.0% (4.03% unrounded) yoy. Headline inflation rose0.41% mom, which bumped up % yoy to 5.4% from 5.3%. Energy prices soared 1.3%mom and
The Atlanta Fed’s GDPNow measure has screeched to a halt: This measure is a very good leading indicator for US growth so pay attention to it. TSLombard has more: The anticipated Q3 slowdown was very much in evidence in the August personal income data–they indicate 1% real consumption growth Q/Q (SAAR) in Q3 and 3.5%
Deutsche looks at the role of oil in central bank thinking: The financial world is trying to work out what the implications are for the energy price shocks we are seeing and whether central banks should tighten policy as a result or keep policy loose to reflect possible demand destruction that it might eventually bring.
Goldman with the note: Assuming that Republicans do not vote for a debt limit suspension in the near-term, this seems likely to come to head in the second half of October. The deadline is not entirely clear, but we think it is most likely to fall in late October. We expect the Treasury to provide
Goldman with the note: House Speaker Pelosi and Senate Majority Leader Schumer have announced that they plan to move forward with legislation that ties an extension of government spending authority (a “continuing resolution”) with a suspension of the debt limit. A vote in the House looks likely this week. Republican leaders have reiterated their opposition to
Goldman with the note: We estimate Congress will need to raise the debt limit by mid-October, though it is possible the Treasury might be able to operate under the current limit until late October. It is possible, though not likely, that the Treasury might be able to continue to make all scheduled payments until sometime
Goldman with the note: Treasury Secretary Yellen sent a letter to congressional leaders this morning (Sep. 8) indicating that the the Treasury will exhaust its cash and extraordinary measures “during the month of October”. This is in line with our expectations, though slightly sooner than the “October or November” timing that the Congressional Budget Office
Goldman with the note. There are now signs that the Delta wave is cresting, with a drop in the positivity rate over the last couple of weeks and a more recent decline in new hospital admissions. We therefore expect a job market rebound in coming months and have also offset part of the Q3/Q4 GDP
Goldman with the note: Sen. Joe Manchin (D-W. Va.) has attracted substantial attention with an op-edin the Wall Street Journal regarding his views on upcoming fiscal legislation. In it, he calls for a “strategic pause” on consideration of the $3.5 trillion/10 years budget reconciliation legislation, which Democratic leaders hope to assemble in committees over the
Goldman with the note: We estimate nonfarm payrolls rose 500k in August, below consensus of +725k. While the seasonal hurdle is relatively low in August, the monthly pace and cross-section of Big Data employment indicators are consistent with a sizeable drag from the Delta variant. On the positive side, we expect the reopening of schools
Morgan Stanley with the note: We are revising down 3Q GDP tracking to 2.9% from 6.5%, previously. Our forecast for 4Q GDP remains at 6.7%. The revision to 3Q implies full year 4Q/4Q GDP at 5.6% (5.7%Y) this year – 1.4pp lower than the Fed’s forecast of 7.0% in its June Summary of Economic Projections
Nothing good. BofA on the American experience: The Conference Board report yesterday revealed a sizable drop in consumer confidence to a six-month low of 113.8in August, down from 125.1 in July. The consensus was forecasting only a small decrease. The data echoed a similar slide in the University of Michigan sentiment index, which fell to
BofA with the note: Recent Covid developments have been somewhat encouraging. Weekly case growth in the US has dropped to around 5%. Cases appear to be at or close to the peak in some states–most notably Florida–that were hit the earliest and the hardest by the Delta wave. Yet we think the situation is likely
Goldman with the note: With the Supreme Court striking down the federal eviction moratorium and with most state-level restrictions set to expire over the next month, we explore how sharply evictions could rise under current policy, and we estimate the potential impact on the economy. Despite a severe recession, evictions actually declined during the coronacrisis
Morgan Stanley with the note: As Congress reconvenes, we expect progress to our base case of more fiscal expansion and identify key risks to our view. Recent news on spending plans offer hints on bill structure. We adjust our deficit growth estimates to~$1tr over five years and~$1.5tr over 10, but as low ramp in year
Is Fed taper coming or not? Goldman says it is. Or does it? The Fed’s Jackson Hole Economic Policy Symposium will take place this Friday. The theme of the conference is “Macroeconomic Policy in an Uneven Economy.” Chair Powell will give a speech on the economic outlook at 10am EST on Friday that will be
Nordea with the note: We generally had the feeling that the Jay-Man was a dead man walking within the Fed as Lael Brainard’s style and opinions suited the Biden administration much better than Powells, but suddenly it seems less clear that Brainard will take over the reins next year as Janet Yellen allegedly backs Powell.
It won’t be fast as we reopen next year into endemic COVID. Via Goldman: Economic activity: Our consumer spending tracker has declined moderately and now stands at 98.9% of the pre-virus level, down from an average of 101%in July. The softness in activity appears to be driven by renewed virus fears—53% of adults now ascribe
Morgan Stanley with the note: July jobs report delivers evidence of substantial further progress. The rates market took notice and bonds sold off hard with 10-year Treasury yields reclaiming the 200-day moving average. Equity markets took their cue from this move in rates with the Russell2000 up and the Nasdaq down. Cyclicals had their best
Credit Agricole with the note: The stronger than expected NFP report on Friday boosted the USD across the board as it seemingly helped the Fed move closer to QE taper and policy normalization. Indeed, the data likely alleviated some of the officials’ recent worries that a jobless recovery in the US could compromise their inability
Forex markets did as expected after good US jobs on Friday night. DXY took off as the Fed taper takes centre stage and EUR broke new lows: The Australian dollar was clubbed lower versus USD: Gold was poleaxed and oil is in trouble: Base metals never like the a strong DXY: Miners managed to hold
Via Calculated Risk: On Friday at 8:30 AM ET, the BLS will release the employment report for July. The consensus is for 900 thousand jobs added, and for the unemployment rate to decrease to 5.7%. There were 850,000 jobs added in June, and the unemployment rate was at 5.9%. This graph shows the job losses
