US Economic Weekly Update
Our weekly update of the developments and key themes around the US economy
- Consumer confidence for March could be an early indication of how the banking sector’s stress is affecting consumers’ outlooks, while core PCE likely decelerated in February.
- We believe the Fed has delivered the last hike of the cycle as financial stability considerations rise and financial tightening renders likely further hikes unnecessary.
- Our overview highlights the key releases of US economic market data.
US Economic Weekly Key Insights
- We believe the terminal federal funds rate has been reached, and 25bp per meeting cuts and the halt of QT will start March 2024.
- Ongoing financial stress should generate enough financial tightening to replace at least several 25bp rate hikes.
- Financial stability will now likely be the primary consideration in upcoming federal funds rate decisions.
- H4.1 and H.8 data on the Fed’s balance sheet and commercial bank lending suggest ongoing stress, but do not show conditions deteriorating.
- Core PCE inflation will likely decelerate to a 0.36% m-o-m increase in February, with the core services ex-housing subset in focus.
Read our full US Economic Weekly report here.
Contributor
Aichi Amemiya
Senior US Economist
Jacob Meyer
US Economist
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