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Economics

Take a deeper dive into the global repercussions of recent political events and explore the economic forces of inflation, wages, interest rates, taxes, unemployment, and national currencies and their potential effects on investors and policymakers, in the U.S. and around the world. 
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China flag on a compass.

Is It Finally Time to Invest in China?

China's government recently took policy actions to support economic growth by bolstering the country's property market and stock market. They represent a sea change from President Xi Jinping's previous stance in which he refrained from undertaking bold government stimulus.
Economics, Markets, Policy
long road approaching sunset

Fed Easing & China’s Stimulus Package Boost Equities

Investor optimism has been boosted in the U.S. and China due to recent policy developments—the Federal Reserve's decision to cut interest rates by half a percentage point and an easing of monetary policy and a larger-than-expected fiscal stimulus package in China. Meanwhile, the upcoming presidential election has not had a major impact on financial markets to date. Amid this, we explore portfolio positioning.
Markets, Economics, Wealth Management
Sandy country road through agricultural fields.

Which Path Will the Fed Take to Ease Monetary Policy?

The Federal Reserve recently began a new easing cycle by cutting the federal funds rate by a half percentage point at the Federal Open Market Committee meeting. Market participants took the news in stride, as they had expected the Fed to cut rates by that amount rather than by a quarter point.
Policy, Economics
Seaplane in the ocean lagoon.

Monthly Market Pulse — October 2024

Gain timely insights into the Fed's larger-than-expected rate cut, learn what to watch from upcoming labor market data, and explore the outlook for mortgage rate movement and investment implications.
Economics, Policy, Markets, Fixed Income
Tightrope walker high in the mountains.

What Market Indicators Are Signaling About Recession

Following the soft July jobs report that showed a 4.3% unemployment rate (up from 4.1% in June), some commentators worried that the Federal Reserve had waited too long to ease monetary policy to stave off a recession.
Economics, Markets, Policy
Dollar Sign US Currency American Flag Chess pieces on a chessboard Finance Concept.

The Economy & Markets at Midyear

As the U.S. economy remains resilient and inflation shows signs of moderating, the Fed is holding interest rates steady, aiming for a 2 percent inflation target. Meanwhile, the stock market has reached new highs driven by robust corporate profits and AI optimism, although high valuations may limit future gains.
Markets, Economics, Policy, Equities
Collage of images showing business people working.

Fed's Interest Rate Decision Hinges on Mixed Labor Market Signals

As the Federal Reserve prepares for its next interest rate decision, mixed signals from the labor market present a complex picture. While nonfarm payrolls show strong growth, other indicators suggest a softening job market.
Policy, Economics, Markets
Hourglass on US dollar banknote background. Concept world economic of time to consider raise or reduce interest rate via FED.

How the Fed Can Fight Inflation & Maintain Investor Confidence

The Federal Reserve has confronted a challenging economic environment since the COVID-19 pandemic struck in 2020.
Policy, Economics
Japanese yen banknote and American dollar.

Is the Strong Dollar – Weak Yen Really a Problem?

Recently, the dollar has surged against key Asian currencies, but does this pose a genuine problem for the U.S. and Japan?
Economics, Policy, Markets
Industrial Engineer working with Ai automation robot arms machine in intelligent factory industrial on real time monitoring system software.

Should U.S. Manufacturing Policy Embrace Job Restoration or Retraining?

Both Presidential candidates have emphasized the need to restore jobs that have been lost in manufacturing. However, does the focus on increasing manufacturing jobs make for good economic policy?
Policy, Economics
waterfall in lush forest

Let the Good Times Roll

The debate among investors at the beginning of 2024 focused on how long the economy could sustain above trend growth and whether inflation would continue to decelerate. As we look ahead, most economists have lowered the likelihood of a recession this year considerably amid continued strong economic data, but risks to the bullish outlook remain.
Markets, Economics, Wealth Management
Hands of robot and human touching big data of Global network connection.

AI: Enhancing or Displacing the Future Workforce?

One of the most important debates today relates to the potential impact that generative artificial intelligence (Gen AI) models will have on the U.S. labor market. Some observers see the ongoing process of automation as a harbinger for widespread layoffs, not only for low-skilled workers but also for more highly skilled professionals.
Economics, Policy
View of Russian flag behind barbed wire against cloudy sky.

Russia's Economy Is Better Than Expected, but Not Out of the Woods

This issue of how effective sanctions are in dealing with recalcitrant nations is being discussed once again amid reports that Russia’s economy is faring better than expected two years after the U.S. and European Union imposed sweeping sanctions on it.
Economics, Policy
Aerial view of a large corn maze.

The Yield Curve's Streak of Forecasting Recessions Might Be Over

An inverted yield curve, in which yields on longer-dated bonds are below those for shorter-dated instruments, has correctly predicted the last nine U.S. recessions in the post-World War II era. However, this winning streak could be coming to an end, as the U.S. economy has displayed surprising resilience to the Federal Reserve’s tightening during the past two years.
Fixed Income, Markets, Economics
Cracked brick wall painted with an American flag on the left and a Chinese flag on the right.

Renewed Trade Tensions With China Could Threaten America's 'Goldilocks Economy'

With the U.S. economy performing surprisingly well and the stock market setting record highs, many investors call what is happening the "Goldilocks economy." The main concern now is geopolitical, with the possibility that the Israeli-Hamas conflict could spread throughout the Middle East. However, there is also the risk of a global trade conflict with China that is going unnoticed.
Markets, Economics, Policy
Image with concept of Growth diagram crude oil stock price graph.

Oil, Gas, and Geopolitics in 2024: Saudi Arabia Hanging the Sword of Damocles Over the Oil Market

Expect the oil market to remain balanced in 2024 with oil in the low $70s, a level which could have a minor impact on non-OPEC growth. Midstream equities, under such a scenario, should experience some modest volume growth, while upstream producers could see lower cash flows relative to 2023.
Economics, Markets, Policy
Bull statue on the chess board.

The Blockbuster Jobs Report Should End All Doubts About the Economy

What does the January jobs report mean for the strength of the economy and possible implications for the 2024 elections? And how does this impact the debate about whether the economy is headed for a recession?
Economics, Policy, Markets
Landscape image of White Sands National Park in New Mexico

2024 Outlook: Has the Good News Been Priced Into Markets?

Financial markets often surprise investors, but the past year defied virtually all forecasts. The prevailing view at the start of the year was that aggressive tightening by the Fed would produce a recession. Instead, economic growth far surpassed expectations at 2.6% according to Fed estimates.
Markets, Economics, Wealth Management
Federal Reserve building in Washington DC at sunrise

The Fed Will Lower Interest Rates—But By Less Than What Bondholders Expect

The Fed has signaled it is close to pivoting monetary policy as officials become more confident that inflation is on the path toward its 2% target.
Markets, Economics, Wealth Management
Businessman looks at the horizon through a telescope.

Interest Rate Cuts Are on the Horizon

As investors look ahead to 2024, the central concern on their minds is the extent to which the Federal Reserve will ease monetary policy in the new year.
Policy, Markets, Economics
Empty forked road over conceptual dramatic sky.

Optimistic Investors vs. Gloomy Voters: The Economic Outlook

The end of each year is usually a time for reflection about how the economy and markets fared, as well as for assessing future prospects. Normally, the assessments are a blend of both positive and negative considerations. 2023, however, was different.
Economics, Equities, Policy
Predict the economic future concept with crystal ball and stock charts projected.

The 2024 Financial Landscape Is All About the Fed

In anticipation of the upcoming year, investors are eminently focused on a pivotal question: Are the Federal Reserve's interest rate hikes concluded, and is a rate reduction on the horizon for the next year? While interest rate expectations always matter, the gyrations of financial markets – stocks, bonds, and the dollar — have been dominated the past two years by expectations about what the Federal Reserve will do.
Policy, Economics, Fixed Income, Markets
Business chart arrow down on EURO flag background.

Germany: The 'Sick Man of Europe' and Its Implications for the Euro

While global investors focus on the prospects for the U.S. and China, they should not overlook the euro zone, where the economic outlook has shifted this year. The initial consensus was that Europe would be adversely impacted due to its heavy reliance on Russian natural gas. Instead, the euro zone economy proved resilient, primarily because of unexpected plunges in natural gas prices and crude oil.
Economics, Policy, Markets
Wooden blocks with interest rate percent of bank with US dollars.

An Extended Pause on Fed Interest Rate Hikes Is Prudent for Us All

The Federal Reserve’s decision to leave interest rates unchanged at the recent Federal Open Market Committee meeting was widely expected, given Chair Jerome Powell and other officials previously signaled the outcome.
Economics, Policy, Markets
yellow wildflower growing in desert

How Long Will the U.S. Economy Stay Resilient?

Investors have come to accept that the Fed will keep rates “higher for longer.” Meanwhile, prospects for a soft landing have improved as core inflation has come down significantly this year. Still, investors must assess whether the U.S. economy can stay resilient now that interest rates are positive in real terms and economies abroad are weakening.
Markets, Economics, Wealth Management
High angle view of Shanghai World Financial Center and Jin Mao Tower.

China's Growth Slowdown: Global Investors Should Take Notice

As China's economy has struggled to gain traction this year, many investors accept that its economic growth rate will be below the government’s official target of 5%, which is reflected in a significant underperformance of China's stock market relative to the U.S. and other global peers in the past four months.
Economics, Markets
laser cutting metal

The Anomaly of High U.S. Profit Margins and a Tight Labor Market

The U.S. economy’s performance this year has been an enigma for many people. Real GDP growth has been stronger than expected, while inflation has fallen more quickly than expected. 
Economics, Markets
hawk flying above a forest of trees

2023 Midyear Update: A Clear Message from the Fed Amid Mixed Economic Signals

The first half of 2023 was full of surprises. Bond yields surged initially and then subsequently fell back in early April when several regional banks encountered problems. By midyear, however, yields had risen again as the economy proved resilient to Fed rate hikes. Meanwhile, the S&P 500 Index, which had fluctuated in a broad trading range since mid-2022, broke decidedly to the upside in the second quarter, reaching its highest level since April 2022.
Markets, Economics, Wealth Management
federal reserve logo on 20 dollar bill

The ‘Hawkish’ Fed Pause is a Clear Message That Rates Will Stay Higher for Longer

A pause gives policymakers time to assess whether core inflation, which is running at about 5 percent, will also subside.
Economics, Wealth Management
U.S. paper currency

The Dollar’s Demise is Being Greatly Exaggerated

A question often asked is, how long can the dollar retain its status as the world’s principal currency? There have been numerous occasions when commentators declared an end to the dollar’s dominance—only to be proven wrong.
Economics, Wealth Management
U.S. and China flags

Biden Must Reach Out to Xi Before the U.S.-China Impasse Becomes Irreconcilable

World trade has slowed over the past five years due to tariffs imposed, supply chain disruptions, the Russian-Ukraine conflict, and, recently, U.S. export controls, which are intended to hinder Chinese advances in technology. The challenge for policymakers now is to find a way to ease tensions before fissures in the global trading system leave it divided.
Policy, Economics
Fed building at sunset

Should Monetary Policy and Regulatory Policy Be Separate?

The Fed is following its standard procedure of separating the conduct of monetary policy, which is geared to achieve low inflation and full employment, from regulatory policy that is intended to preserve financial stability. The view is that monetary policy should not be altered when a financial institution becomes insolvent unless it is systemically important. While this makes sense in theory, there are many gray areas in implementing policy.
Economics, Markets
fishing boat with fog in the distance

Bank Runs Spell More Uncertainty for the Economy

The bond market experienced one of the most volatile quarters in history in the first quarter of 2023. There also remains uncertainty about how widespread issues are in the banking sector and how these could impact the economy as a whole. We believe that if a recession does transpire, it will be mild, as household and business balance sheets are strong.
Markets, Economics, Wealth Management
russian oil rig

The Russia-Ukraine Conflict is a Wildcard for Investors

Russia’s invasion of Ukraine caused not only a geopolitical earthquake but also a storm of uncertainty for U.S. investors and the global economy at large.
Economics, Markets
zen garden

The Debate Over 60/40 Portfolios: The Fed’s Role in Distorting Capital Market Pricing

Are investors still striking the right balance with the popular 60/40 portfolio?
Economics, Markets, Wealth Management
shipping container going under bridge

The Continuing Mystery of Biden’s Trade Policy

When President Biden assumed office two years ago, proponents of free trade hoped it would signal a break from President Trump’s protectionist stance. To the chagrin of many, Biden’s trade policy remains a mystery.
Economics, Markets
A puzzle of people with missing pieces

How Can Job Growth Be So Strong When the Economy Is Soft?

This question has surfaced in the wake of blockbuster jobs growth in January. Nonfarm payrolls increased by 517,000 and were accompanied by upward revisions in the two previous months, while the household survey posted nearly a 900,000 increase. They resulted in the unemployment rate falling to 3.4%, the lowest level since 1969. Is this a statistical fluke?   
Economics, Markets
US coins spilled from a jar

The Battle Over Federal Spending: GOP Tactics May Change but not the Outcome

Shockwaves over the debacle to elect Kevin McCarthy (R-Calif.) House Speaker have dissipated by now, but the fallout over raising the federal debt ceiling is just beginning. How will this play out and how will it impact the economy? 
Policy, Economics
man climbing ice mountain

The 2023 Outlook: Policymakers Are Constrained as Recession Risks Loom

2022 was one of the worst years for U.S. stocks and bonds, as inflation spiked to a four-decade high. Looking ahead, the key issue for investors is whether Fed tightening will spawn a U.S. recession. Fort Washington’s Senior Economic Advisor Nick Sargen shares a 2023 outlook for the economy and how we are positioning investment portfolios.   
Economics, Markets, Wealth Management
Norway in the winter

Is This Europe’s Winter of Discontent - or Putin’s?

As 2023 gets underway, most forecasts for the global economy are downbeat as central banks combat inflation by raising interest rates. Among developed economies, Europe faces the worst predicament because it is also impacted by a squeeze in natural gas supplies from Russia.
Policy, Economics
gridlock traffic

The 2023 Budget: A Final Attempt at Compromise Before Policy Gridlock Sets In

In the wake of the 2022 midterm elections, many observers believe the most likely outcome for fiscal policy over the next two years will be gridlock. This comes after the Democrats enacted major spending programs in the past two years.
Policy, Economics
Wall Street sign with stock market

Will Investors Care if the Fed Lessens its Commitment to 2 Percent Inflation?

During the past year, investors have fixated on how pro-active the Federal Reserve was in tackling inflation. What will happen if the Fed does not retain its 2% inflation target in 2023?
Policy, Economics
small business reopening

Prioritizing COVID Relief: How to Break the Stalemate

The recent surge in COVID has resulted in partial shutdowns of businesses in several states that threaten to dampen the pace of U.S. economic recovery. What is a reasonable way to break the stalemate? 
Economics
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