US monetary policy


Jerome Powell

Jerome Powell wrestles with an intricate conundrum

J. P. Marín-Arrese | US Federal Reserve Chairman Jerome Powell faces the dilemma of choosing the right path, confronted with conflicting data and forecasts. While the US economy grew at a booming 4% rate in the first quarter, inflation trails far behind the Fed’s objective and salaries fail to pick up despite historically low levels of unemployment. Moreover, the trade tug-of-war with China is denting confidence in consumers and investors alike. Should the conflict turn worse, the economy might suffer a harsh blow.


US monetary policy: pragmatism as new guidance

US Monetary Policy: Pragmatism As New Guidance

Financial markets expect the US Federal Reserve (Fed) to raise its federal funds target rate on Wednesday for the fourth time this year, by 25 basis points (i.e. between 2.25% and 2.50%). Looking ahead, the FOMC will likely revise its “dots” lower for 2019, while the Fed will emphasise data dependence as relevant for its policy stance, rather than guidance by FOMC ‘dots’.


Donald Trump US president

The threat of US economic policy deadlock is looming

The markets are becoming increasingly sceptical about Trump’s ability to enforce any coherent economic policy mix. Even if his advisors in this field are seasoned bankers, the White House is rapidly losing its grip on critical decision-making areas, such as the budget stance.


The odds of a next rates hike by the Ded

The Odds On An Early Rate Hike

The outstanding labour market performance in the US has triggered widespread speculation of a Fed rate hike as early as September. Nonetheless, most new jobs are part-time, while the hourly wage increase lags well behind its pre-crisis pace.



Janet Yellen

Rates: Back to the waiting game

The FED not only held unchanged its rates in its last FOMC meeting last week. It plunged investors into utter disarray by delivering an extremely dovish message on future action. The prospect of a hike this year loses steam while bewildered markets pull back to the waiting game.



UK US labour markets

US and UK separated by a common labour market performance?

LONDON | June 19, 2015 | UBS | There are some striking similarities currently between the US and UK labour markets. The unemployment rates are broadly the same, employment growth is similar, and the level of vacancies suggests continued jobs growth in both countries. Moreover, there are solid signs that pay growth has picked up in both the UK and US. 


GM races to placate shareholders

WASHINGTON D.C. | March 18, 2015 | By  Pablo PardoOn December 19, 2008, George W. Bush announced that the US would allocate $13.4 billion to rescue General Motors. Between April 22 and June 1, 2009, Barack Obama provided the company with $36.1. In the end, the state ended up with a 61% of the stake of what is still the second largest car manufacturer in the world.