3 min readYesterday, President Trump announced via Truth Social that he would be suspending reciprocal tariffs on nearly all countries for a 90-day period – marking a significant de-escalation in U.S. tariff policy. While not entirely clear from the President’s post, the indication is that countries previously in line to face tariffs above 10% will now be…
4 min readYesterday, President Trump announced a broad array of tariffs in what is arguably the most consequential trade action since the establishment of the WTO in 1995. Invoking national security interests, the President announced the imposition of a 10% minimum global tariff effective April 5th. Canada and Mexico were the only notable exceptions, with USMCA-compliant goods…
4 min readEconomic forecasting is oftentimes an exercise in futility. Analysts with access to all the data and the best models can be no more accurate in their forecasts of unemployment and GDP than the average layperson with some conceptual knowledge. Take for instance September’s jobs report, which caught nearly everyone by surprise. Most analysts predicted non-farm…
7 min readIn April, The Wall Street Journal reported that former President Donald Trump’s advisory team has been drafting proposals that could potentially alter the structure of the Federal Reserve, in the event he is elected for a second term. The former President’s team has yet to publicly confirm the existence of such plans, but the reporting…
7 min readIntroduction The Bank of Japan’s (BOJ) meeting last month was perhaps the most consequential central bank meeting of the entire year. The BOJ raised interest rates by 10 bps to 0-0.10%, all-in-all a small amount in magnitude. However, this marked the first interest rate increase by the central bank in 17 years. Moreover, it marked…
16 min readCo-Authored by Pate Campbell, Analyst CFA Managing the Risks Posed by Tightening Financial Conditions DOWNLOAD REPORT Executive Summary Financial conditions are tightening, primarily as a byproduct of the Fed’s interest rate hiking cycle. This portends that households and businesses may be less supportive of economic growth than they have been in the post-Covid period. Households…
9 min readCould potential changes in the economy from the end of the Fed’s tightening cycle lead to a higher neutral rate? Introduction With the Federal Reserve System (the “Fed”) nearing the end of its tightening cycle, the question for investors has shifted to whether rates can truly remain “higher for longer”, to quote the current in-phrase…
6 min readWhat happened with Credit Suisse and what cash investors may be able to take away from the experience. Amidst the recent turmoil in the banking system, investors have taken a renewed interest in their bank debt holdings, particularly in the case of Credit Suisse. In a highly unusual move, regulators flipped the established creditor hierarchy…
7 min readThe History of the Fed’s Quantitative Tightening (QT) and its current standing The Fed’s history with Quantitative Tightening (QT) is both limited and perilous. Its only prior experience with Quantitative Tightening in 2018-2019 ended in disaster, when funding markets locked up in September 2019 due to a lack of available liquidity. This episode is infamously…
2 min readCo-authored by: Pate Campbell Economic News The December Employment Report revealed a decline in the unemployment rate to 3.5% from 3.7% while 233K jobs were added to non-farm payrolls. Despite ongoing tightness in the labor market, average hourly earnings grew at 0.3%, slower than the rate in previous months. Lower hourly earnings growth not only…