All Posts Tagged: consumer spending

U.S. Outlook: Interest rate normalization is ‘hurry up and wait’

Chief Economist

“Hurry up and wait” pretty well describes the state of monetary policy today as the Fed goes further down the path of interest-rate normalization.

Graph showing recent downward trend in consumer spending.With the March rate hike decision, the FOMC, in my opinion, took the opportunity to fire a shot across the bow against rapidly tightening labor markets, rising consumer inflation, and stock market gains that some analysts find excessive given the current economic environment.

For more on these developments, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on March 17.

Key observations:

  • Some analysts are starting to toy with the idea of a more aggressive Fed delivering four rate hikes this year, but we are sticking with our forecast of three.
  • Despite all the action in the labor market, prices, and sentiment measures, GDP growth in the first quarter is likely to be underwhelming.
  • Consumer spending appears to be slowing significantly in the first quarter.
  • If GDP growth and inflation re-accelerate over the summer as we expect, the Fed can comfortably move again in September.

Click here to read my full report.

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Instant Analysis: Fed raises rates at March meeting

Chief Economist

Today’s decision to raise the fed funds rate does not signal that the FOMC is off to the races on aggressive interest rate hikes over the next three years.

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Investment Insights: Animal spirits flying too high?

Posted by Wade Balliet
Investment Strategy

The animal spirits that lifted the market to each new high may have hit their limits, as the S&P 500 Index has failed to advance the past few trading sessions and consumer confidence may be starting to lose momentum.

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U.S. Outlook: Feeling good — is it the stock market or the economy?

Chief Economist

Investors have gotten extremely comfortable with the economic environment and outlook — some would say the mood is positively complacent.

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U.S. Outlook: A better end to 2016 and a promising start for 2017

Chief Economist

It’s now official that the U.S. economy got back on track in the second half of 2016.

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