Economic Commentary

It was an eventful week. The Fed lowered short-term interest rates, as expected, and ended the unwinding of the balance sheet two months early, but Chair Powell disappointed stock market participants by describing the move as “a mid-cycle adjustment” rather than the start of a series of rate cuts. In his press conference, Powell repeatedly […]

Chief Economist Scott Brown discusses current economic conditions. Real (inflation-adjusted) GDP growth rose at a 2.1% annual rate in the advance estimate for 2Q19, a bit better than the median forecast (+1.8%), but growth was concentrated in just two components, consumer spending and government. Everything else was down. GDP growth is rarely even, but the […]

All right, one more time. Tariffs raise costs for U.S. consumers and business, disrupt supply chains, invite retaliation, and undermine business fixed investment. Is the impact of tariffs showing up in the data? Some, but we haven’t fully felt the impact of the May 10 escalation. Anecdotal evidence suggest a greater impact – enough to […]

As expected, the Federal Open Market Committee left short-term interest rates unchanged and indicated that it “will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective.” Senior Fed officials were divided on whether it […]