Northern Trust
Increased Risks to Both Sides of the Dual Mandate
At Wednesday’s press conference, Chair Jay Powell signaled a wait-and-see approach, as the Fed keeps a close eye on inflation pressures and the job market.
Gold Has Many Buyers
Most economists and portfolio managers are cautious when discussing gold. Its handling and transaction costs are high, and it pays no interest or dividends.
Criticism of The Fed: Rule, Not Exception
In recent times, central bank independence has been taken as gospel. Political pressure for easy money contributed to extremes of inflation in the 1970s.
U.S. Treasuries Falling Out of Favor?
For decades, U.S. Treasuries have been universally regarded as a benchmark and a safe haven asset during periods of turmoil.
Energy Prices Are Not Well Grounded
Many American consumers recently endured their first inflationary cycle, and recent trade headlines have elevated fears of a another bout with higher costs. While not impacted by tariffs, energy markets may play a critical role in driving the price level during the balance of this year.
Rare Earth Restrictions
After the U.S. imposed substantial tariffs on China, Beijing responded with tariffs of its own and with restrictions on exports of seven rare earth minerals. The latter action will be a particular hindrance to American manufacturers.
The Trials and Tribulations of Trade
American leaders are now engaged in an effort to reverse the loss of manufacturing. The hope is to restore a path to prosperity for struggling regions and their residents. Tariffs are being employed liberally as a means to this end.
Bracing for Impact
Unexpected wider and larger-scope tariff announcements have sent tremors through bond and equity markets, resulting in a brisk sell-off that signals investors’ caution.
It’s Complicated
Asia-Pacific will likely be the hardest hit region from a steep increase in U.S. tariffs.
The Great Wall
President Trump has been a vocal admirer of China’s Great Wall, built by the country’s emperors to protect their territory from outside aggression. In his first term, he compared his plan to build a border wall with that historic structure.
Oh, Canada
To say that it has been a tumultuous year in Canada would be an understatement. The country’s business model, which relies heavily on commerce with the United States, has been put under severe stress by the American administration.
The “Soft” Data Gets Softer
A divide has recently developed between soft and hard economic data. At a time when conditions are changing rapidly, understanding the difference between the two is terribly important.
Trade War Will Take a Toll
The deferral of “reciprocal” tariffs on most U.S. trading partners suggests that the peak of tariff uncertainty may have passed.
Tariff Shock: Managing a Portfolio Through the Turmoil
With uncertainty in abundance, we think investors should avoid drastic moves.
Recalibrating for Higher Risk Without Overcorrecting
We’re adjusting our stance in response to rising risk while maintaining a disciplined view on long-term strategy.
The Price of Protectionism - Tariffs Toll On Growth
We reexamine our macroeconomic outlook in light of newly announced tariffs, which have exceeded market expectations and prompted us to update our assumptions and analysis.
Trump's Reciprocal Tariffs: No Fooling Around
The 10% across-the-board (ad valorem) tariff and specific reciprocal tariffs on most U.S. trading partners went well beyond what most were expecting.
Navigating Tariff Complexities
We examine the April 2 tariff announcement from President Trump, outlining key proposals and the potential implications for trade and market sentiment.
Is Another Currency Accord Ahead?
The last time the dollar needed policy intervention was in 1985. The dollar was ascendant, and that put American exports at a disadvantage.
A View From the Foreign Exchange Desk
We call upon an expert for the latest on foreign exchange markets.
Believe It or Not
The substantial shift in U.S. trade policy will put a significant dent in growth in major markets.
More Questions (and Answers) on Tariffs
We’ve written quite a bit on tariffs already this year, and appropriately so. Developments on this front have been significant and are of global consequence.
Quantitative Tightening Nearly Terminated
The time is right to let the Fed's balance sheet level off.
Tariff Tantrum
As policy uncertainty grows, we consider how tariffs and other government actions might impact inflation, interest rates, and market sentiment.
US Economic Outlook: Path Dependent
Whenever political questions arise, we always encourage a broader view: politicians don’t control the economy, and policy changes rarely move markets. But the past month has raised serious questions over that assertion.
Sustaining Economic Statistics
When breakthroughs occur, researchers get the lion’s share of the credit. But they owe a big debt of gratitude to those who collect and organize the data with which insight is manufactured.
China Stimulus: Better Luck Next Year
Two Sessions, or Lianghui, is the popular name for the annual meeting of China’s top legislative and consultative bodies. These gatherings are closely watched by overseas observers as they provide key insight into China’s political landscape, economic priorities and overall policy direction.
Sustaining Economic Statistics
When breakthroughs occur, researchers get the lion’s share of the credit. But they owe a big debt of gratitude to those who collect and organize the data with which insight is manufactured.
Southeast Asia Tries To Preserve Trade
Many ASEAN members punch above their economic weight in international trade. But their power may also make them targets in the mounting global trade battle.
Two Policy Risks in the Spotlight
Looming U.S. and global policy shifts may potentially rattle markets, but a tactical and flexible approach could help investors navigate risks and opportunities regardless of how events play out.
Tariff-fied
An aggressive U.S. tariff regime will come down hard on major economies.
Long and Variable Lags
The economy can grow through policy changes.
Looking Back on the Tax Cuts and Jobs Act
The greatest benefits of TCJA were deep in its details.
Seasonal Challenges With Economic Data
At this time of year, those of us who live in the Northern hemisphere are looking forward to a change of season. Statistically, every February week in Chicago should see the daily high temperature rise by 2-3 degrees Fahrenheit, but conditions can vary significantly from expectations.
The Return of Steel and Aluminum Tariffs
U.S. dependence on metal imports could prove costly.
China and the U.S. Trade…Tariffs
An escalation seems more likely than diffusion in the U.S.-China trade battle.
Exploiting the Benefits of Artificial Intelligence for Factor Investors
Our research shows how artificial intelligence can potentially enhance performance of equity investing.
What the U.S. Tariffs Mean for Investors
We analyze the impact of U.S. tariff proposals on markets and how investors can manage their portfolios accordingly.
How Is China Dodging U.S. Tariffs?
The costs and revenue of U.S. tariffs are being blunted by evasion.
China’s Transitory Rebound
China will struggle to maintain momentum without addressing deeply-rooted problems.
Tariffs: A Case Study
The market for washing machines offers lessons for future trade actions.
Washington Gets to Work on a Budget
Tax and spending cuts will face Congressional roadblocks.
The Price of Progress
We explore how evolving priorities under the new U.S. administration may influence markets and investor outlooks.
Fasten Your Seat Belts
The Northern Trust Economics team shares its outlook for key APAC markets.
Index Investing as an Active Decision: An Exploration of Evolution and Customization
We explore how advancements in indexing solutions have allowed investors to tailor their portfolios according to their specific objectives or risk profiles.
Yields Flashing Yellow
From the start of December to their recent peaks, 10-year yields have gained 68 basis points in the U.K., 60 basis points in the U.S., 55 basis points in Germany and 48 basis points in Canada.
2025 Municipal Bond Sector Outlook: Stability and Resiliency
Outlooks for higher education and healthcare are the weakest while transportation and essential utilities are the strongest. Resiliency to withstand an economic downturn is strong for all sectors.
US Economic Outlook: Pre-Season Prospects
The Northern Trust Economics team shares an outlook for U.S. growth, inflation, employment and interest rates.
Europe Moves Further Away From Russian Gas
Most of us like to ring in the new year with fresh energy. The Europeans appear to have made good on this resolution.
Random Thoughts
To clear our notebooks entering 2025, here are quick perspectives on a range of topics.
High Hopes, Solid Grounds
We prefer equities over fixed income, in particular U.S. equities as the outlook for the U.S. economy is solid and promising.
Reflections on 2024
We look back on six themes that defined another eventful year.
Is Fed Independence at Risk of Presidential Influence?
We believe that there are several guardrails in place that considerably limit the extent of presidential influence over monetary policy decisions.
Tracking Contingent Workers
As the year comes to a busy conclusion, we’re still catching up with news that didn’t make the front page. In the first week of November, the U.S. Bureau of Labor Statistics published a data release that’s even less frequent than the four year presidential election cycle.
Liberté, éGalité, Austérité
Last weekend, the Cathedral of Notre Dame reopened after being severely damaged in a fire five years ago. It took thousands of craftsmen and a reported €840 million to restore the iconic structure.
Is India Gaining From China’s Decline?
International commerce often follows the simple rule: one nation’s loss can result in another’s gain. China’s loss from escalating trade tensions with the U.S. is generating gains for several Asian economies, but India is not one of them.
Treasurers: Balancing Liquidity, Diversification, and Daily Demands
How a diversified liquidity strategy might help time-strapped corporate treasurers reduce vulnerabilities and improve adaptability in uncertain markets while maintaining access to cash.
Chaotic Commitments at COP29
We are prone to animal analogies when describing disorderly situations: like herding cats, like a barrel full of monkeys, like a dog’s breakfast.
The Latest on Washington, From Washington
New ideas are never as easy as they sound in campaigns.
Myths and Reality
Sticky underlying price pressures could prevent a faster return to neutral monetary policy.
What’s Ahead for the Fed
Lost in the excitement of election week was a meeting of the Federal Reserve. At its conclusion, interest rates were lowered by another quarter-point. But where they are heading from here is a matter of increasing uncertainty.
Overseas Consequences of the U.S. Election
In sport, play is limited by time or innings. Lineups are set, rules are fixed and boundaries are defined. Winners are determined objectively.
Never a Dull Moment
The Northern Trust Economics team shares its outlook for U.S. growth, employment, inflation and interest rates.
Reflections on the 2024 Election
The people have spoken. While there are still some unknowns, the contours of the American government that will be seated next January are reasonably clear.
A Steady Ship
Western economies are inching towards soft landings, and their central banks are reducing interest rates. These developments will be helpful to economies in the Asia-Pacific region as they conclude 2024 and look forward to next year. However, the outlook for China remains a central concern.
The World Isn’t Ready For Reform
Enthusiasm for structural reforms is only going to wane.
Closing The Year Well
The Northern Trust Economics team shares its outlook for growth, inflation and interest rates in major markets.
U.S. Election: Prepare Now for Potential Tax Shifts
Our analysis explores how potential post-election tax policy changes might impact dividends, capital gains, and municipal bonds and how investors might prepare for different election outcomes.
The Election And The Fed
An independent central bank supports better economic and market outcomes.
U.S. Election 2024: An Analysis of the Tax Scenarios for Investors
With the election looming, investors should prepare for potential changes in tax policies, particularly given the impending sunset of the 2017 Tax Cuts and Jobs Act.
The Role of Regulation
The regulatory outlook is a question of direction more than extent.
Tough Choices for Energy Policy
Energy policy decisions today will have long-lasting implications.
A Steady Ship
Asia-Pacific economies will benefit from soft landings and easier monetary conditions.
Soft Landing Takes Shape
The Northern Trust Economics team shares its outlook for U.S. growth, employment, inflation and interest rates.
Big Flow of Small Businesses
New business formations have held up, but closures are also rising.
Europe Is Following the U.S. Election Closely
The election could alter the thriving relations between the U.S. and Europe.
S&P 500 Index Rebalance: Steady Preference for Technology
The latest S&P 500 rebalance introduced Dell and Palantir to the index, and Apple’s weight grew with annual float changes, signaling technology’s ongoing influence.
How Stocks Historically Performed During Fed Rate Cut Cycles
Our research shows that on average U.S. stocks performed well a year after the start of a Federal Reserve rate cut cycle.
Trade Policy: More Sticks Than Carrots
Tougher stances on trade are a point of bipartisan agreement.
Short Port Strike
Sports fans know that a lot can change in the fourth quarter of a game. So too for the U.S. economy, as a substantial labor action commenced the minute that calendars turned to the fourth quarter of 2024.
S&P 500 Earnings Breadth Broadens
Our experts explore the implications of wider S&P 500 earnings growth, potential Fed rate cuts, and the outlook for global equities and bonds amidst ongoing economic shifts.
Global Economic Outlook: Fall Has Arrived
The Northern Trust Economics team shares its outlook for growth, inflation and interest rates in major markets.
Tax Policy: A New Course Is Required
Tax cuts are popular but not affordable for most nations.
The Debate Over Debt and Deficits
Fiscal responsibility is not a priority in this election.
Considering Moving Out of T-bills? A Guide to Determine What’s Next in Your Portfolio
Since mid-2022, when the Federal Reserve was in the midst of its aggressive hiking cycle, investors piled over $1.6 trillion into money market funds, which include Treasury bills.
No Half Measures
The Northern Trust Economics team reacts to the Fed's decision and shares its outlook for U.S. growth, employment and inflation.
MSCI Index Rebalances: China’s Weight Continues Decline
MSCI boosted India’s weighting in the MSCI Emerging Markets Index and reduced China’s in its latest quarterly rebalance, continuing long-term trends.
Seizing the Opportunity in Emerging Markets
With attractive valuations, emerging market equities look like a good opportunity. A factor investing strategy, designed well, may enhance performance and help manage some key risks.
Municipal Bonds: Fiscal 2025 State Outlook
States enter fiscal 2025 maintaining stable reserves and moderating fixed costs, yet we expect many will need to make modest spending cuts due to exhaustion of federal pandemic aid.
Index Investing as an Active Decision: Implications for Fixed Income Investors
Passive fixed income index investing has evolved significantly over the previous decade, offering investors the flexibility to align risk requirements and investment goals. Learn more from our experts.
Volatility Strikes in September: Our Thoughts
We think the decline in the S&P 500 Index on Tuesday may be more technical than fundamental.
China’s Bond Market Rally
A bright spot in Chinese investment could spell trouble for its financial institutions.
Reinforcing Economic Foundations
The case for infrastructure investment is rising, but so are its costs.
Fundamentals Matter
While short-term fluctuations and sudden selloffs have tested the markets, key indicators such as corporate profits, employment data, and economic resilience have held firm.
Analysis of Fed Chair Powell’s Comments: September Cut Likely, but What After?
We analyze Federal Reserve Chair Jay Powell’s comments about the potential for rate cuts in September and beyond.
Global Tourism Regains Lost Ground
The 19th Century American author Mark Twain once said: “Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one’s lifetime.”
Getting to the Bottom of “Greedflation”
That anthem was characteristic of the era. After two decades of economic frustration, free market policies had prompted a surge of growth and a bull market for stocks. The captains of industry were corporate raiders, who purchased companies, slashed expenses, pushed up prices and reaped outsized rewards.
High-Yield Bonds: Exploring Opportunities in a Volatile Market
We explore how strong fundamentals and a resilient economy may position high-yield bonds as a potentially compelling choice in today’s fluctuating market.
Why Is Housing Still Expensive?
Last week, we explored the old economic rules that falsely predicted an imminent recession. Losing those guideposts has complicated our efforts to craft an outlook.
A Script for Jackson Hole
Powell will hint at normalizing monetary policy, but at a measured pace.
Rules Are Meant to Be Broken
Previously reliable recession signals have not worked in this cycle.
Hot Summer, Cool Data
Slower employment cements the case for the Fed to start a series of rate cuts.
Reflecting on the Impact of the USMCA
North American trade is booming, but gains have been uneven.
Global Economic Outlook: Staying Focused
The Northern Trust Economics team shares its outlook for growth, inflation and interest rates in major markets.
Index Investing as an Active Decision: Implications for Equity Investors
Today’s passive index investing requires active choices, as customization and innovations in index funds have resulted in new considerations for investors and the potential for greater control.
The View From Canada
I chaired an international economics conference in Canada earlier this month. Delegates from all over the world attended to discuss the issues of the day. Following is an abridged version of the meeting summary that I offered during the closing session.
Western Influence
Western demand and monetary policy are having an important impact on economic prospects for the Asia-Pacific region.
Are U.S. Consumers Tapped Out?
Slower spending is a part of the return to normal economic conditions.
The U.S. Tries to Close a Trade Loophole
Metals from Mexico may have a much further point of origin.
The Value of Economic Data
Analysts periodically construct elegant algorithms that produce interesting conclusions, only to learn that the underlying information is flawed.
The Final Descent
The Federal Reserve is in the pilot’s seat as the American economy approaches a soft landing. The runway is in sight, but some careful maneuvering will still be needed.
Europe Is Dealing With Deficits
The initiation of the excessive deficit procedure will hinder European unity.
Automation and Anxiety
History suggests that it is better to embrace progress than hinder it.
Summer Index Rebalances: How They Work and Why They Matter
Rebalancing events help ensure benchmarks maintain exposure to companies within their targeted asset class or markets, but the rebalancing can also impact investment portfolios.
Rate Cuts Begin
Initial rate cuts by the European Central Bank and Bank of Canada may signal a transformative trend toward monetary easing.
Transitioning to T+1 Settlement Cycles: The Advantage of Firm Expertise
Adapting to the new cycles requires swift operational changes, making the guidance of experienced managers crucial.
The Summer Solstice
The Northern Trust Economics team shares its outlook for major markets, with a spotlight on the eurozone.
Inflation’s Permutations
Chief U.S. Economist Ryan Boyle explains why measures of inflation don't match feelings about prices.
The Rise of the China Plus One Strategy
The allure of China as a global manufacturing hub is unlikely to fade anytime soon.
Britain Goes to the Ballot Box
The health of the British economy is top of mind for voters in this election.
Cross-Checking Employment Reports
An array of data sources show a labor market that still has plenty of strength.
Fed's Conservative Inflation Projections Could Mean Two Rate Cuts
Despite a seemingly Hawkish stance, a closer look suggests the Fed’s conservative inflation estimates could lead to more rate cuts than anticipated.
The ECB Pulls the Trigger
European disinflation allowed for a first cut, but the pace from here will be gradual.
Treasury Auctions Are Becoming Hard Sales
I will never forget the first auction I witnessed. It took place during one of the many summers that I spent on a farm. The auctioneer talked exceedingly quickly, but those in the crowd seemed to understand everything he said.
Long-Term Opportunities in European Value Stocks
European value stocks offer a compelling case for short- and long-term investment opportunities, supported by strong fundamentals, attractive valuations, and favorable market conditions.
Prospects for Teenage Workers
Summer hiring promises more than just monetary rewards for teens.
The Changing Landscape of Foreign Direct Investment
Investors are reconsidering long-term capital commitments.
Long-Term Opportunities in European Value Stocks
European value stocks offer a compelling case for short- and long-term investment opportunities, supported by strong fundamentals, attractive valuations, and favorable market conditions.
Blooming Not Booming
The Northern Trust Economics team shares its outlook for growth, employment, inflation and interest rates in major markets.
Shedding Light on Private Credit
Will the rapid growth of private credit impair financial stability?
Upgrading Equities Over Bonds
We explore how stabilization and growth of global markets may potentially shift preferences toward equities relative to bonds.
Good Is the Enemy of Great
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.
Inflation’s Signal and Noise
Skepticism is warranted when inflation stories exclude bad news.
Is Hong Kong Losing Its Sheen?
Hong Kong's prospects are closely linked to the outlook for China.
The Fed and the Ballot Box
The FOMC has enough factors to consider without adding politics to the mix.
Dollar Gains
The stronger U.S. dollar is benefiting America, but creating troubles in other geographies.
U.S. Private Credit: What the Markets Are Missing About Attractive Risk-Reward Tradeoff
There are attractive investment opportunities in private credit against a backdrop of a U.S. economy that continues to outpace the eurozone and the U.K.
Fed Chair Powell Lays Out Macroeconomic Scenarios
We saw a dovish slant to Powell’s remarks at yesterday’s press conference, with no rate hikes in sight.
Navigating Small Caps: The Importance of Sidestepping Low Quality
For investors considering adding small-cap stocks to their equity portfolios, we suggest they do it selectively, steering clear of more speculative investments.
India Elections: All That Glitters Is Not Growth
Having played sports my whole life, there is hardly an outdoor activity which I haven’t tried. I have been known to skip irksome social gatherings just to get out on to the fields.
Industrial Policy, for Better and Worse
Government economic intervention has persisted since the pandemic.
Widening the Gap: High Yield Bonds and Market Dispersion
Amid economic challenges, increased dispersion in high yield bonds suggests opportunities for selective investment choices versus broad sector-based strategies.
Resilience and Divergence
The Northern Trust Economics team shares its outlook for growth, employment, inflation and interest rates in major markets.
The Sovereign Debt Problem
Debt distress is rising fast, but restructuring is becoming more complex.
Seeking Stability
The Northern Trust Economics team shares its outlook for key APAC markets.
Plot Twist
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.
China's Currency Challenge
The Chinese yuan is softening in line with the nation's economic outlook.
Higher for Longer
We had expected the Federal Reserve to start cutting rates in June. But as more of our audiences asked why, we saw the case was not strong. This week’s inflation reading seals the deal: we now expect the easing cycle to start in September.
Keys to Fixing the U.S. Budget
We’ve covered some of the issues related to America’s fiscal crisis in recent months.
First Quarter Checkpoint: 2024 Market Performance
Analysis of Q1 2024’s equity market reveals the stage is likely set for a favorable equities market for the remainder of 2024.
The Economics of Water
Water raises the risks of conflict, civil unrest and economic pain in many parts of the world.
A Look Back at the Negative Interest Rate Era
Negative interest rates have more cons than clear pros.
The Federal Budget Gets a Failing Score
We need a much more conservative approach to projecting budget outcomes.
Bank of Japan's Return to Policy Orthodoxy
The negative rate experiment has ended. What comes next?
Europe: Struggling to Keep Pace
Cautious investment is holding back the outlook for European nations.
U.S. EV Sales Need a Boost
More charging stations and lower prices can break EV sales out of their slump.
Sit Tight
The Northern Trust Economics team shares its outlook for major markets, with a spotlight on China.
NATO by the Numbers
Europe needs to boost defense spending while managing stretched fiscal positions.
Global Tax Deal: Unfinished Business
Corporate taxes illustrate the complexity of global policy coordination.
The WTO Fights To Remain Relevant
The World Trade Organization is struggling to settle international tensions.
Will China Follow Japan’s Past?
Japan's prolonged downturn has lessons for other nations at inflection points.
Good Deflation
One of the pleasant surprises of 2023 was how quickly inflation decelerated in major economies. Most of the good news came from falling goods prices.
Credit Cards Showing Strains
When consumers fall behind, the credit card bill goes unpaid.
The Power of Productivity
Over the past two years, we have had to revise a lot of numbers upward: the Fed hiked rates more than we expected, inflation has been sticky and growth has far exceeded expectations.
Eurozone: A Slow Recovery in the Making
As the U.S economy continues to expand at a nice rate of speed, the eurozone is stuck in a pitstop. Though the common currency region was able to avoid a technical recession last year, preliminary estimates show that activity stagnated in the fourth quarter of 2023.
China’s Equity Market Downturn
Gross domestic product (GDP) is often considered the most important indicator of the health of an economy. But there are other measures that provide different perspectives, which can be more timely and impartial. The level of equity markets is one such indicator that provides a window into what’s going on.
Small Businesses Tell A Big Story
Small businesses are a vital part of the American economy. The U.S. Small Business Administration estimates that they represent over 46% of employment and account for the majority of new job creation. Small business openings are an expression of optimism in an entrepreneur’s ability and support from their community.
Saving Grace
Saving rates rose immensely across economies during the pandemic period. Government support programs, many designed to stimulate demand, elevated household incomes.
Much To Discuss at Davos
This week saw the annual World Economic Forum (WEF) in Davos, Switzerland. Top researchers join public and private sector leaders to explore the issues facing the world. Every year features an outlook for key risks; this year, the risks felt less hypothetical than they might have in calmer times.
Getting Back To Work
There are about 44 million American men between the ages of 25 and 44, a time of life which is traditionally associated with high rates of employment. Yet members of this cohort are much less likely to be working than they were 20 years ago.
Energy: Stability Despite Shocks
The higher level of U.S. oil production is helping to keep global prices contained.
EU Agrees to Reform Its Fiscal Architecture
EU nations have compromised on paths toward fiscal balance.
Government Shutdowns: New Year, Same Story
Progress on a 2024 U.S. federal budget has been limited.
Top Themes of 2023
The economics teams looks back at the most significant stories we covered during 2023.
ECB Preview: Caution Is Warranted
The ECB will pivot in 2024, but probably not as early or swiftly as markets predict.
Navigating To Neutral
The secular forces that held down rates for forty years have not entirely changed.
‘Tis The Spending Season
American consumers are becoming more frugal this holiday season.
Loosening Labor
Both supply and demand of workers will prevent a surge in unemployment rates.
Weighty Matters for Canada
The Canadian economy is buckling under the weight of higher interest rates, household debt and immigration.
Loosening Labor
Both supply and demand of workers will prevent a surge in unemployment rates.
High Rates Are Pinching The World's Homeowners
Housing markets are cooling but unlikely to end in a bust.
Private Credit Boom
Financial flows have shifted this year. In the credit arena, bank lending has been moribund throughout the year, as standards tightened and interest rates rose. But borrowers still need capital, and private lenders are increasingly meeting their needs.
Financial Stability: Cloudy, With A Chance Of Showers
The banking system has stabilized, but latent threats remain.
Survey of Consumer Finances: Consumers Are Fine
Households are better off today than before the pandemic.
Global Economic Outlook: Expect the Unexpected
Forecasting economic outcomes is a challenging exercise, even under steady conditions. Geopolitical events have only added to the complexity facing economies worldwide.
A Deep Dive Into U.S. Debt
The longer the U.S. debt is left to grow, the harder it will be to correct.
U.S. Economic Outlook, October 2023
The U.S. economy’s remarkable resilience is complicating the lives of investors and the Federal Reserve. Despite war-disrupted commodity markets and one of the most aggressive monetary tightening phases in modern history, economic activity has remained strong.
Higher Uncertainty Around Higher Yields
Higher long-term bond yields will allow the Fed to do less on short rates.
Gender Studies Earn The Nobel Prize
Women are still underrepresented among economics majors and in a range of professions.
A Return To The EU’s Old Ways
Reverting to old fiscal rules will create a strong economic headwind for Europe.
Uneasy Un-Retirements
Older workers can still be a source of relief for tight labor markets.
Bearing Down On Banks
New bank rules will raise borrowing costs and weigh on economic activity.
Energy Prices Are Creating Discomfort
Resurgent energy prices could contribute to higher for longer monetary policy.
Walking Out On The Auto Industry
The strike comes at an inflection point for automotive production.
Shifting Foreign Holdings of U.S. Debt
Evidence of China's slowdown is appearing in unexpected places.
Global Economic Outlook: China Casts a Shadow in the East…and West
The Northern Trust Economics team shares its outlook for major markets in the months ahead.
Fed Preview: Done, Or More To Be Done?
The FOMC will make some close calls and tough decisions.
U.S. Economic Outlook, September 2023
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.
Measuring The Cost Of Healthcare
Measuring, anticipating and controlling the cost of healthcare are all difficult.
Checking The Health Of Consumers
Credit balances are not the only consumer indicator running high.
What's Ahead For The Fed's Balance Sheet?
The Fed's asset portfolio is on an uncharted course.
Global Economic Outlook: Slow Motion
The Northern Trust Economics team shares its outlook for major markets in the months ahead.
High Spreads Pushing Up Mortgage Rates
Volatile rates are adding to the cost of residential debt.
Inflation: Great Expectations
Holding expectations low will help the battle against high prices.
Productivity: Earning Our Keep
Better productivity is easing employers' burden of higher wages.
U.S. Economic Outlook, August 2023
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.
The Great Remote Work Debate
Return to office mandates are growing, but workers are hesitant to give up flexibility.
Putting Young People To Work
Young workers are struggling to find jobs, despite labor shortages.
Not Making The Grade
The nation's complex and contentious fiscal processes are deemed a credit risk.
Soft Landing: Are We There Yet?
How will we tell if the mythical soft landing is happening?
U.S. Economic Outlook, July 2023
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.
Hotter Summers Ahead
El Niño will test the resilience of both infrastructure and food supply chains.
Seller's Inflation
Corporate profits are being challenged by market forces, diminishing pricing power.
Rebuilding Housing
An upturn in residential activity may be the next inflation challenge.
What's Next for Student Debt?
Income-driven repayment will ease the burden of resuming student loan payments.
Global Economic Outlook: Hawk-Eyed
There is renewed anxiety among central bankers in the face of sticky inflation.
U.S. Economic Outlook, June 2023
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates, and inflation.
Commodities: No Longer A Crude Shock
Volatile input prices have been a major inflationary force.
The Global Economy Is Suffering From Long COVID
In many respects, COVID-19 was not a temporary disruption.
Mass Transit Is Facing Massive Challenges
Transit has not made a complete recovery from the pandemic.
Risks to Growth Are Ample but May Prove Surmountable
The Northern Trust Economics team shares its outlook for major markets in the months ahead.
Hong Kong Struggles To Balance East And West
Hong Kong’s currency and financial stability are not under immediate threat.
The View From China
Both domestic and external forces may limit China's growth prospects.
U.S. Economic Outlook, May 2023
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates, and inflation.
Global Tourism: An Incomplete Recovery
Macroeconomic and geopolitical hurdles are slowing the full recovery of tourism.
Debt Ceiling: High Risk, Low Reward
What follows a technical default? We hope we will not need to find out.
Dissection of European Inflation
A wage-price spiral isn't imminent in Europe, but inflation may take a while to descend.
Is The Fed Draining Deposits?
The Fed's tools for managing interest rates are adding to deposit competition.
Inventories: The Other Stock Volatility
The 2011 U.S. reality television show Doomsday Preppers showed an uncommon side of life, spotlighting families that prepared to survive extreme, potentially fatal scenarios. Their plans included accumulating a surplus of food, fuel, and other essentials, all of which came at a cost.
Approaching Stall Speed
We favor high yield bonds and natural resource stocks as inflation still shows persistence, earnings expectations deteriorate and worries mount over a stalling U.S. economy.
Emerging Market Vulnerabilities
The latest IMF reports shows the mounting risks facing emerging markets.
Bank Stress and Lending Standards
How will tighter lending standards become evident in the economy?
Higher for Longer
Financial volatility continues to moderate amid settling in the banking sector. Economic data in much of the world has remained positive. But a slowdown is in store. Businesses and households will have a harder time borrowing as credit conditions tighten further. Financial risks have risen.
Intermittent Storms
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.
The Digital Dollar's Difficulties
The case for a central bank digital currency has many shortcomings.
Money Market Funds: Any Port In A Storm
Money market funds are attracting deposits for more reasons than just SVB.
Strikes, Shamrocks, And Systemic Risk
If I did not have bad luck, I would have no luck at all.
The Consequences of Credit Suisse
The demise of a major bank illustrates the global tensions in the financial sector.
Silicon Valley: The Consequences of a Bank's Failure
The full story of SVB is still unfolding, but we offer some initial reactions.
Are Job Openings Overstated?
Elevated job openings may not give an accurate view of labor market conditions.
Central Bank Portfolios Are Underwater
If marked to market, assets purchased during quantitative easing are in the red.
India Seeks More Manufacturing
Can India capitalize on supply chain realignment to build its manufacturing sector?
Hard to Achieve a Soft Landing
History shows a high risk of recession when central banks fight inflation.
The New Brexit Protocol
A revised approach to Northern Ireland will lower trade tensions in Europe.
Finding the Will to Refill the Strategic Petroleum Reserve
A drawdown to fight energy inflation has left the SPR at a new low.
Central Bank Portfolios Are Underwater
If marked to market, assets purchased during quantitative easing are in the red.
Winter Resilience
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
Don't Count Your Chickens
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.
The Pandemic Did A Number On Schoolkids
Time out of school is still weighing on student performance.
Argentina and Brazil's 'Sur'real Joint Currency Plan
Differing economic cycles and limited trade links will make the sur unfeasible.
Central Banks vs. Financial Conditions
Markets are no longer shocked by central bank tightening.
The Fed Is Focused On Service Prices
Inflation is a mixed picture, with services staying hot.
Are Inflation Targets Still On Point?
Now is not the time to consider changing inflation targets.
Are Inflation Targets Still On Point?
Now is not the time to consider changing inflation targets.
Global Economic Outlook: Run-of-the-Mill
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
From Inflation Reduction To Trade Friction
America's subsidies for domestic EVs have created new tensions with Europe.
A Not-So-Fresh Start
The Northern Trust Economics team shares its outlook for growth, inflation, employment, and interest rates.
Holiday Shopping Season: What Recession?
U.S. consumers did not slow their spending over the holidays.
Did The Bank Of Japan Join The Tightening Club?
A surprising shift in Japan's monetary policy.
Themes From A Busy Year
The economics teams looks back at the most significant stories we covered during 2022.
Slower Growth, Slower Hikes
The Northern Trust Economics team shares its outlook for inflation, growth, employment and interest rates.
Mortgages May Force Central Banks To Back Off
The recent escalation in interest rates is squeezing household budgets.
Flexible Work Helps Disabled Workers
Disabled workers are helping close the labor gap thanks to remote work.
Europe Tries To Get Its Finances Back In Order
Europe needs higher investments, which will only be possible with an overhaul of its fiscal rules.
Thanksgiving Is Getting To Be An Expensive Habit
Inflation has spread to our holiday celebrations.
Election 2022: A Recipe For Gridlock
A split government will limit aggressive agendas and progress on important longer-term issues.
Slower for Longer
The Northern Trust Economics team shares its outlook for inflation, growth, employment and interest rates.
A Deep Dive Into The Chinese Economy
Internal priorities and external circumstances have brought China's growth to an inflection point.
Global Economic Outlook: Doom and Gloom
After a strong rebound from the pandemic in 2021, it’s been all downhill for the global economy this year. Economic activity is being hindered as policymakers cope with the hottest inflation in decades, impairments from the Ukraine war, and China’s prolonged lockdowns. Recession fears are starting to come true.
Another Supply Shock For Oil
Renewed increases in energy prices come at a bad time in the battle against inflation.
Close Call
The Northern Trust Economics team shares its outlook for growth, employment, inflation and interest rates.
Hurricane Ian’s Economic Impact
Hurricane Ian has laid bare the challenges facing Florida’s insurance industry.
A Balance Sheet For The U.S. Economy
A path remains in sight for the U.S. to avoid a recession.
Europe: Bracing For A Cold Winter
Policy responses to shortages are not always effective.
Rising Rates Are Complicating Fiscal Policy
The pandemic drove up debt, and higher interest rates are adding to the burden.
The Decline of Demographics
Populations are aging, and the economic consequences will be substantial.
Holding Up
The Northern Trust Economics team shares its outlook for growth, inflation and interest rates.
Partial Student Debt Forgiveness: A Half Measure
Writing off a portion of student debt does not fix the core challenges of paying for higher education.
Reshoring Realities
Scarcity and trade frictions are leading to major supply chain realignments.
Inflation Reduction Act: What's In A Name?
A long negotiation cycle yields green investment, a smaller deficit and higher corporate taxes.
International Tourism: The Long Journey To Recovery
The tourism industry remains vulnerable to macroeconomic, public health and geopolitical risks.
Balance Sheets Are Barriers Against Contagion
Household, corporate and bank balance sheets are more resilient today than during past crises.
Running Out of Gas
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
Updating Our Labor Dashboard
Labor force participation is the greatest shortfall in an otherwise thriving labor market.
Emerging Markets: Tested By The Fed
Major EMs are more resilient to U.S. interest rate hikes today than they were in past cycles.
Pain Relief
The Northern Trust Economics team shares its outlook for growth, inflation and interest rates.
Costs and Benefits of Sanctions
A more integrated global economy is making sanctions less effective.
Central Business Districts: Out of Office
Office spaces still have a role in the future of work.
Supply Chains Are Slowly Mending
The availability of goods and cost of shipping are improving.
Abenomics Lives On
Shinzo Abe's policies had a substantial impact both in Japan and around the world.
More Money Supply, More Problems
Reducing the money supply will help to curtail inflation.
Our Latest Views On Recession
Though risks are rising, strong hiring and purchase activity suggest that the economy can keep growing.
Municipal Bonds: 2023 U.S. States Outlook
Revenue above expectations, pandemic federal aid and reserves have strengthened states' financial outlook. But states will need to prepare as pandemic aid winds down and the economy slows.
Mid-Year Themes
Inflation, China, Russia, Central Banks, Labor, Recession: It's been quite a year thus far.
Somber Summer
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
Of War And ESG
Sustainable investing needs to adapt to new realities without compromising its core principles.
Heating and Cooling
The Northern Trust Economics team shares its outlook for growth, inflation and interest rates.
An Active Week For Central Banks
How high do interest rates have to go to control inflation?
Why Some Value Strategies Struggle When Value Stocks Surge
Not all value strategies have benefited equally during value stocks’ recent outperformance versus growth stocks.
Japan Finally Gets Some Inflation
Japan zero-inflation mindset is no match for today's price pressures.
Recession Talk Is Exaggerated
Strong employment and spending will help the economy grow through current shocks.
Getting Hitched Is Getting More Expensive
Wedding costs reflect the myriad forces that have driven inflation upward.
How Inflation Went From Dormant To Dominant
Policymakers and forecasters were slow to change their mindset about inflation.
Global Economic Outlook: Tightening Up
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
Expeditious
The Northern Trust Economics team shares its outlook for growth, inflation and interest rates.
China’s Renminbi Depreciation: Red Flag?
RMB depreciation won't offer much support to Chinese growth.
Can We Repeat The 1994 Soft Landing?
The Fed will need some luck on its side to deliver another soft landing.
Drugs and Long COVID Prevent Full Employment
Drug abuse and long-haul COVID are obstacles to getting back to work.
Recession Risks: False Precision
The risk of an imminent recession is low, but next year is anyone's guess.
Rumors of the Dollar's Demise Are Greatly Exaggerated
The dollar is not as dominant as it was two decades ago, but is still the leading global currency.
A New Phase of Recovery
The Northern Trust Economics team shares its outlook for growth, inflation and interest rates.
Emission Disclosures: Sunlight on Climate Risks
What role do financial statements play in climate change?
Quarterly Report: The War to End All Wars
The first quarter of 2022 brought violence that rocked communities – and markets – internationally. We look at what aftershocks may still be yet to come.
Oil Intensity: Return on Investment
Output is not falling, but the amount of energy required to fuel that activity is diminishing.
Why High Dividend Stocks Make Sense Amid Bond Volatility
The Federal Reserve’s first rate hike in years has sparked bond volatility, pushing investors to search for yield elsewhere.
Should the Fed Fear the Yield Curve?
The yield curve's movements are unlikely to change the Fed's course.
Consequences for India from the Russia-Ukraine War
India's economic links with Russia leave it in a delicate position.
Global Economic Outlook: War-Fare
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
Tight Oil
The Northern Trust Economics team shares its outlook for growth and interest rates in a context of high inflation.
Investment Perspective: Less Growth, More Inflation
With no end to Russia’s attack on Ukraine in sight, energy and agriculture are feeling the strain.
The Impact of War on Emerging Markets
Price shocks are a boon for some emerging markets, while a curse for others.
Update On The Russian Conflict: Economic Combat Begins
Russia's actions will have immediate and long-term ramifications.
Ukraine-Russia: A Crude Shock
This week's biggest news adds to the complications in energy markets.
Global Economic Outlook: Prices And Peacemaking
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
Consumer Credit Growing
Consumer spending and borrowing have rebounded, and delinquencies have not.
Investment Strategy Commentary: Geopolitics
As tensions between Russia and Ukraine mount, so too does market volatility.
Inflated Expectations
The Northern Trust Economics team shares its outlook for inflation and how the Federal Reserve will react.
Unwinding Quantitative Easing Won't Be Easy
The size and timing of QT will depend on financial conditions and the evolution of inflation.
No Pivot Yet For The ECB
The macroeconomic picture still doesn't support the case for monetary tightening in the eurozone.
Labor's Love Lost: A Deep Dive Into "The Great Resignation"
Ongoing labor market shifts are a risk to economic growth.
Global Economic Outlook: Touch And Go
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
Investment Strategy Commentary: Market Pullback
Spurred by rate hike concerns, geopolitical tensions and more, markets saw a 10% correction intra-day today – find out how that impacts our outlook.
In Like A Lion
The Northern Trust Economics team shares its outlook for the Federal Reserve and the U.S. economy.
Too Much Cash Is Not A Good Thing
Excess cash has accumulated in every corner of the economy.
The Fed Picks Up The Pace
The Fed has made a sharp pivot by accelerating the tapering of its asset purchases.
Themes of 2021
The economics teams reflects on six themes that defined an extraordinary year.
The Fed's Taper: Accelerando
High inflation and strong economic data may make the Fed hurry to conclude asset purchases.
U.S. Economic Outlook, December 2021: There Arose Such A Clatter
The Northern Trust Economics team shares its outlook for the U.S. economy.
Cooperation at COP26
The latest climate pledges are encouraging, but fulfilling them will be a challenge.
COVID-19 Threatens Europe’s Recovery
The deteriorating health situation in Europe threatens to send the recovery into reverse.
Will Wages And Prices Spin Out Of Control?
Once started, wage-price spirals are hard to stop.
Global Economic Outlook for 2022
In this special report, the Northern Trust Economics team shares its outlook for growth, inflation, employment and interest rates in the year ahead.
U.S. Economic Outlook, November 2021: Working Through It
The Northern Trust Economics team shares its outlook for the U.S. economy.
Labor: Strike While the Iron Is Hot
Strikes and quits show workers are feeling emboldened.
Central Banks Try To Stay Ahead of the Curve
The phrase “behind the curve” originates from aviation. The “power curve” maps an airplane’s speed to the thrust applied by the engine. This relationship varies with conditions; being behind the power curve can risk stalling or damaging the plane.
Talking Turkey
With Turkey’s central bankers being shown the door, foreign investors are likely to follow.
Case Studies In COVID-19 Control
There is no one-size-fits-all approach to dealing with COVID-19.
Tomorrow’s Green Energy Is No Help Today
The higher the costs of conventional energy, the greater the case for investment in clean energy sources.
Award-Winning Remarks
Global themes we are tracking: public health, de-globalization, policy retreat, technology and the East and West divide.
Global Economic Outlook: Fourth Quarter Comeback
The outlook for the fourth quarter and beyond is positive, but the recovery remains uneven. The Northern Trust Economics team shares its outlook for key markets in the month ahead.
The Fed’s Ethics Are Being Tested
Personal trading could undermine public trust in the Federal Reserve.
Testing Times For Multilateralism
Unilateralism is not a remedy for multilateral institutions.
The Fed’s Ethics Are Being Tested
Personal trading could undermine public trust in the Federal Reserve.
The Big Short(ages)
The Delta variant’s impact on supply chains and domestic spending slowed economic activity in the third quarter. Consumer confidence dipped noticeably, and businesses’ outlook dimmed somewhat. Rising inflation, the product of goods and labor shortages, has been a concern.
Mounting Headwinds For The U.K.
Today's supply and inflation challenges stem from Brexit.
Top Economic Risks For The Fourth Quarter
Several events will have major influences on the global economy in the months ahead.
Canada Elections: Back To Square One
Canada's election yielded no changes, leaving housing as the key risk to watch.
China Confronts Minsky And Moral Hazard
The spillover from the property sector to the broader economy could be significant.
The Initial Acceleration Stage Of The Recovery Is Behind Us
The Delta variant and supply constraints are the biggest worries for the global outlook.
Fed Preview: Time To Taper
The Fed governors will soon decide when and how to taper asset purchases.
U.S. Economic Outlook, September 2021
The Northern Trust Economics team shares its outlook for the U.S. economy.
What Next for Europe’s Fiscal Rules?
Europe still needs fiscal support to preserve stability and growth.
Fiscal Policy: A September To Remember
The U.S. Congress faces major financial deadlines in the month ahead.
China's Debts Are Coming Due
Evergrande is an example of the risk of debt defaults to China's financial stability.
This Expansion Doesn't Get A Lot Of Credit
Household savings and central bank policies have reduced the need for credit.
Trucking Is In The Slow Lane
Trucks are a vital link in supply chains, but there aren't enough people to drive them.
The Global Economy Has An Inventory Problem
New virus outbreaks in supplier nations are adding to inventory problems.
Fasten Your Seatbelts
The recovery has had its ups and downs, but the economy is moving in the right direction.
The Return of Industrial Policy
Governments are finding their place in supporting development.
Pushing for Productivity
The debate over post-pandemic scheduling often centers on productivity.
Global Economic Outlook: Dog Days Of Delta
A firm economic recovery is well underway, but the fast-spreading Delta variant is clouding the outlook.
Delta Force, ECB's Strategy Review, State of the States
Delta has the potential to alter the path of recovery; central banks are rising to face heavy challenges; and U.S. states have survived a major stress event.
View from the Peak
The Northern Trust Economics team shares its outlook for the U.S. economy.
The "Summer of Labor", Latin Lethargy and Sweden's Light Lockdowns
Workers have the upper hand, but not for long; Latin America stagflates; and Sweden provides a case study in COVID-19 response.
Economic Commentary: Themes of the First Half of 2021
Reflecting on a busy six months of vaccines, inflation, trade relations, supply chains, and policy challenges.
Economic Commentary: Brexit, Restaurants, Boeing and Airbus
Brexit is as complicated as we expected, but restaurants are reviving and aircraft tariffs are suspended.
Global Economic Outlook: Summer Boom
Many economies are now in advanced stages of economic reopening, but some are still struggling.
Economic Commentary: Productivity, Australia, Returning to Work
Crisis investments may yield a lasting boost to productivity, while Australia's restrictions pose a lingering risk.
Economic Commentary: Inflation's Past, Present and Future
From base effects to bottlenecks, wages to pricing power, inflation questions abound.
Economic Commentary: China's Recovery, U.S. Trade Deficit, Household Well-Being
China was the first nation to enter recovery, and high U.S. import demand has helped it.
Global Economic Outlook: Uneven
Advanced economies are doing better than emerging markets.
Economic Commentary: Biden Goes Big, U.S. Debt Ceiling, Scotland Elections
Biden pushes more spending just as the U.S. debt ceiling returns from hiatus, while Scotland's standing in the U.K. is uncertain.
Fed's Patience Tested, Slow Labor Markets, India's COVID Crisis
Labor markets are changing course. When will the Fed do the same? India's second wave will disrupt activity elsewhere.
Economic Commentary: "Buy American," Economics of Sports, Tax Evasion
"Buy American:" easier said than done. Sports leagues are still struggling, and tax evasion is costly.
Economic Commentary: Worker Retraining, India's Second Wave, Evidence of Recovery
Human capital needs renewal; COVID-19 sweeps through India again, while the U.S. economy springs back to life.
Economic Commentary: Corporate Taxes, Labor Market Slack, Chip Shortages
National corporate tax policies need global coordination; U.S. unemployment rates don't tell the full story.
Global Economic Outlook: Upward Together
The Northern Trust Economics team shares its outlook for global growth in this year of reopening.
Economic Commentary on Infrastructure: U.S. Proposal, Global Gap, Digital Divide
Infrastructure merits more investment, everywhere; we look at the specifics of the U.S. proposal.
Gaining Traction
A year ago, the U.S. registered its deepest economic contraction since the Second World War.
Global Economic Outlook: Elusive Immunity
Failure to boost vaccination programs could hurt the eurozone economy.
Economic Commentary: A Year of COVID-19, Child Benefits, Democracies
Reflecting on the anniversary of the pandemic, revamped child benefits and how democracy fosters economic growth.
Rapid Thaw
Over the past month, the expectations of growth in the year ahead have surged, with fixed income markets repricing and investors shifting allocations in anticipation of growth.
Evolving Risks, School Reopenings, Long-Term Rates
How does risk management work when risks change rapidly?
Economic Commentary: Long-Term Growth, Tourism, Bankruptcies
How long will the effects of COVID be felt in potential growth, the tourism sector and bankruptcy filings?
Vaccine Nationalism, Minimum Wage, Rising Energy Prices
Weighing the costs of global vaccine access, minimum wage and the energy rally.
Emerging From The Shadows
A strong economic rebound is expected towards the middle of the year, followed by a return to more normal growth in 2022.
Student Loan Forgiveness, Super-Sized Stimulus, China-Australia Trade Tensions
Are proposed fiscal policies and student debt forgiveness too much of a good thing?
U.S. Economic Outlook, February 2021
The Northern Trust Economics team shares its outlook for the U.S. economy.
Inflation Concerns, Italy's Battered Economy, Low Rental Demand
Any surge in inflation will likely not last for long, but Italy's economic troubles and the shift in rental markets may endure.
Emerging Market Debt Problems, Fed Exploring Climate Change, Bitcoin Skepticism
Emerging markets seek a sustainable solution to debts, and the Fed takes a step toward sustainability.
Economic Commentary: Vaccination, Stimulus, Agriculture
Faster vaccination and bigger stimulus can pave the way to a better year, and agriculture subsidies upset trade relationships.
Big Data for a Big Year
A variety of data sources show we are closer to normal, but not fully recovered.
Looking Back at 2020
From global responses to local lockdowns, we all witnessed dramatic changes in 2020.
The Global Economy Will Likely Find Firmer Footing After the First Quarter of 2021
Promising developments surrounding vaccination give us hope that 2021 will be a better than year than the one that is about to end.
Slow Brexit, Overloaded Shippers, Growing Fed Balance Sheet
Brexit negotiations had another unproductive week. Parcel shipping volumes are breaking records. And when and why might the Fed alter its asset purchases?
U.S. Economic Outlook: Brighter Days Will Return
While some indicators are slowing, we are optimistic for a better year ahead.
Janet Yellen, Consumer Spending, RCEP
Yellen is a good candidate for a tough job, and we review the outlooks for U.S. holiday spending and trade in Asia.
No Single Story to the COVID Recovery
Recovery from COVID-19 has been a mix of successes and setbacks.
U.S.-China Outlook, Fed’s Programs Ending, Presidential Authority
Fair trade over free trade will remain the theme in Washington.
Humbling Outbreak
The Northern Trust Economics team reviews the outlook for developed markets facing COVID-19.
Post-Election Projections
The Northern Trust Economics team forecasts the U.S. economy’s continued recovery.
Election Reflections, State and Local Struggles, Liquidity Traps
The 2020 election dims the outlook for major legislation and aid to local governments, while central banks face the risk of a liquidity trap.
Investments in the Future: Infrastructure and Education
Our election 2020 coverage concludes with a look at the nation’s physical and human capital.
Immigration in the Election, Population Growth Slowing, U.K. Fights a Second Wave
Fostering immigration, encouraging family expansion, and stopping COVID-19 are tough problems with no easy solutions.
U.S. Healthcare, Child Care, Recovery from Debt
U.S. Healthcare Reform Proposals, Childcare Needed to Support Workers, Past U.S. Debt Recovery Won’t Repeat.
U.S. Fiscal Debates, China’s Slowing FDI, and Legislative Stalemates
Our election 2020 coverage begins with fiscal policy, security risks that are slowing foreign investment, and legislative standstills.
U.S. Fiscal Debates, China’s Slowing FDI, and Legislative Stalemates
Our election 2020 coverage begins with fiscal policy, security risks that are slowing foreign investment, and legislative standstills.
Brexit, Fed’s Lending Programs, Young Adults Come Home
Brexit takes an uncertain turn, while the Fed seeks loan borrowers and parents welcome adult children back home.
Northern Trust Capital Market Assumptions Five-Year Outlook: 2021 Edition
In recent years, global equities had slightly outpaced market forecasts for lower equity returns. Then the COVID-19 pandemic hit the global economy, putting an end to the 10-year bull market. Equity markets have now started to recover, but the pandemic introduced and exacerbated challenges that we expect to subdue financial market returns over the next five years.
Inflation Outlook Stays Low, National Champions In Favor, Unemployment Rate Surprises
Breakout inflation is not our top concern. Europe explores support for national champions, and the U.S. unemployment rate masks some fragility.
Recovering, but Not Recovered
The Northern Trust Economics team forecasts the U.S. economy’s recovery from COVID-19.
Monetary Policy Research Review, Emerging Markets At Risk, Complicated Measurements
The Fed’s strategic review added to a bevy of policy research revealed last week.
Monetary Policy Research Review, Emerging Markets At Risk, Complicated Measurements
The Kansas City Fed’s annual Monetary Policy Symposium at Jackson Hole is a signature event for those of us who follow central banks. The conference typically doesn’t generate much front-page news: the subject matter is usually more technical and conceptual than a broad audience would appreciate. But 2020 is not a typical year.
The Fed’s New View on Inflation, Japan’s Struggles, and Housing’s Health
The Fed’s new take on inflation was a long time coming, while Japan’s downturn drags on and U.S. housing stays strong.
Hotel Blues, Eviction Risk, and Argentina’s Debt Dealings
The lodging industry illustrates a panoply of pandemic problems; and keeping people in their homes will be key to economic recovery.
Fiscal Negotiations Stuck, Metal Tariffs Return, and Schools Make Hard Choices
Washington’s inaction on a fiscal deal and action on tariffs are both perplexing, while schools face complicated choices.
U.S. Economic Outlook, August 2020: Healing
The Northern Trust Economics team forecasts the U.S. economy’s recovery from a record-breaking decline.
The Role of Gold; A Less Than Perfect Inflation Hedge.
Gold has been on a tear over the last year, rising 32% while global equities have languished. A common objective of gold is to hedge against some type of risk. This paper shows how gold can reduce downside risk during big down markets, but isn’t the most effective inflation hedge.
How to Aid States, China Recovers from COVID-19, Mortgage Rates Falling Slowly
The U.S. and EU deliberate how to disburse aid, China’s recovery carries risks, and U.S. mortgage rates find a floor.
Automatic Stabilizers, Public Transit, and Money Supply React to COVID-19
Automatic stabilizers prevented an economic breakdown, while trains are running empty and money stays parked.
Growth Prospects and Challenges Ahead for the U.S., U.K., Eurozone, China, and Japan
The first wave of the economic recovery has generally exceeded expectations, but the recent surges in COVID-19 cases could deliver a setback.
Spreading Setbacks, The Paradox of Thrift, and Sports Interrupted
COVID-19’s path is evident everywhere we look: spending, saving, staffing, sentiment, and sports.
On the Mend
The journey to a full recovery will be a long one, but at least we’ve taken some initial steps.
Trade in a COVID-19 World, Unemployment Support, Bank Stress Tests
The challenges keep mounting for global trade, unemployed workers, and banks.
U.S. Coronavirus Cases Rise, Commercial Properties Challenged, and Tourism Lapses
More infections lead to more worry, while the commercial real estate and tourism sectors are put to the test.
Banks Are Put To the Test, Smartphones Measure Movement, and the Poorest Are Hit Hardest
Banks undergo a true stress test, smartphones measure movement, and poverty may rise.
Adding Up Employment, Brexit Marches On, Food Supply Gets Stuck
Why did unemployment fall? Why is Brexit proceeding? And why did so much food go to waste?
Past the Bottom?
Economic data shows mild improvement, but the road to recovery will be a long one.
Roots of Recent Discontent, Shifting Global Production, and Controlling the Yield Curve
Economic factors are motivating recent protests and changes to supply chains.
Timing of the U.S. COVID-19 Policy Responses, China’s New Agenda, Misleading Trends
Faster actions are better in fiscal policy, but that’s not the case for China’s foreign policy.
Recovery From the Pandemic Will Follow Four Curves
The absence of a “V-shaped” recovery means trouble for policy makers, mortgage finance, and emerging markets.
Surveying the Damage
The Northern Trust Economics team gives a perspective on a tough outlook for U.S. growth and employment this year.
Big Questions for Monetary Policy, New Ways Gauge the Decline, and the Fed Lends Dollars Around the
Will inflation soar? Will monetary policies work as intended, and what precedent are they setting?
Examining China’s Recovery, the Auto Market, and Mexico’s Response
China’s recovery and Mexico’s policy choices can be questioned, but the automotive sector’s slump is not in doubt.
Small Businesses and Oil Market Shocked by COVID-19, but Don’t Rush Reopening
SMEs and oil are feeling the demand decline, leading to calls for reopening businesses.
Getting Paid to Lower Your Risk
Using low volatility strategies to lower risk and capture alpha.
Charting New Territory in Monetary Policy, Unemployment Aid, and Australia
Policy measures to aid financial markets and labor forces through the crisis are wide-ranging.
Uncharted Waters - April 2020
Economic activity is expected to recover in the second half of the year, but the shocks in some parts of the world could last for longer.
Policies Try to Keep Pace with the Pandemic, Coronabonds Test Europe, Paycheck Protection Pandemoniu
Economic activity descended in an elevator and will climb back up on the stairs.
Coronavirus Risks for U.S. Consumers and India
Many consumers entered the crisis with no cushion.
Free Falling
Decisive measures taken today should help to keep the crisis from causing prolonged damage.
Congress Goes Big, States Play a Vital Part in Recovery, and a Dollar Crunch Takes Hold
Relief efforts measured in trillions of dollars are bound to have some positive effect.
Major Fiscal Action Needed to Avoid a Downturn, Travelers Stay Put, Oil Adds to Stress
Substantial fiscal policy is the best economic prescription for COVID-19.
Coronavirus Clouds the Outlook
Economic news will get worse before it gets better, but we expect the U.S. economy to pull through.
Central Banks Spring Into Action While Coronavirus Adds To Europe’s Ailments
Can policymakers minimize economic disruptions from COVID-19?
Is An Economic Pandemic At Hand?
We’ve been closely watching developments related to COVID-19 for the past several weeks. While we have hesitated to make significant changes to our outlook until evidence is clearer, we now expect the economic damage done by the outbreak will be more significant than initially thought.
Growth Prospects and Challenges Ahead for the U.S., U.K., Eurozone, China, and Japan
The coronavirus outbreak is sending ripples through global supply chains and disrupting businesses.
A Tale of Tail Risks
The U.S. economy has been resilient in the face of uncertainty, but risks are growing.
The Lowdown on Low Inflation
A deep dive into the factors that brought inflation down and are keeping it low.
Making Everyone Count, Coronavirus Goes Viral, Davos Debates
The U.S. Census is a vital research tool; the coronavirus is a vital risk.
U.S. and China Sign a Deal, Inequality Eludes Measurement, Canada Leads with Fiscal Policy
Phase One: A limited deal is better than none.
Inequality: We can’t manage what we can’t measure.
Canada: Taking the lead with fiscal policy.
U.S. Consumer Outlook, Pension Protests in France, and Australia’s Wildfire
A strong economy will help U.S. consumers meet their financial resolutions in the new year, while residents of France and Australia have bigger worries.
Tail Risks Rising, Iran’s Economic Misery, and 737 MAX/Min
Tensions between Iran and the United States brings a stressful start to 2020.
Growth Prospects and Challenges Ahead for the U.S., U.K., Eurozone, China, and Japan
Continued modest global growth in 2020 may be the best we can hope for.
The Year’s Top Economic Themes
Rates were unpredictable, central banks were active, trade was volatile but consumers were undaunted. We reflect on the major economic trends of 2019.
Ending a Busy Year for the Federal Reserve
Rate cuts and overnight operations were important developments this year. Where will the Fed go from here?
Quick Takes
From freight volume to flight delays and real estate to recession risk, we share quick thoughts on a variety of economic subjects.
A Smarter Way to Invest in Small Cap Value (Duration 30 minutes)
Overloaded with infinite choices when investing in small caps? Join us to cut through the noise and learn how to determine which fund is the best fit for your client’s portfolio.
In this session, veteran portfolio manager, Robert Bergson, CFA will draw on his own investment strategies to walk you through the importance of small cap value in today’s uncertain market and his approach to the small cap universe.
You will learn:
- Why small caps make sense in uncertain market environments
- Ways to improve the efficiency of your small cap allocations
- How to separate good/compensated risks and bad/uncompensated risks within small cap stocks
Negative Rates, Payment Systems, and Protests
In the bond market, staying positive is easier said than done.
China’s Slower Growth, the Laffer Curve, and Rate Cuts in Australia
China’s economy is slowing by any measure, while Australia’s central bank takes rates to record lows.
November Global Economic Outlook
Growth Prospects and Challenges Ahead for the U.S., U.K., Eurozone, China, and Japan.
Wealth Tax Proposed, Resilient Energy Market, EU Exports Taxed
Wealth taxes are politically resonant but difficult to enact. Oil prices are steady despite disruptions, while the EU’s food exports face tariffs.
U.S. Economic Outlook
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
Government Borrowing Grows, Fed Rate Outlook Is Steady
This week’s Fed meeting started a pause in overnight rate cuts. But what will happen if yields on the long end move up?
Brexit Progress At Last, Ireland’s History Comes Back to Life, Reform for Fannie and Freddie
Are the latest Brexit and GSE proposals the end of the beginning or the beginning of the end?
A Long Road to a Limited Trade Deal, Canada’s Economy Will Decide Elections, ‘Nobel’ Ways of F
Deep U.S.-China divisions make a ‘phased’ deal our best hope for trade progress.
PMI Worries, Puerto Rico’s Turnaround, and Social Impact Bonds
Exploring the survey that is the current cause for concern.
Roundabouts, Not Crossroads
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
Labor Market Disrupted, Overnight Funding Pinched, Japan Raises Taxes
- Automation will squeeze the middle of the labor market.
- Overnight lending markets are finding their equilibrium.
- Japan planned its tax increase to minimize disruption.
The Fed’s Dilemma, Draghi’s Parting Gift, Mortgage Rate Meltdown
Fed is set to ease, ECB eases and mortgage refinancing takes off.
Past Peak Season
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
More Brexit News, Strong U.S. Labor Force, and Mixed Results from Sanctions
What fueled the rise in U.S. employment, and can we sustain it?
September Global Economic Outlook
The Northern Trust Economics team shares its growth outlook for the U.S., U.K., Eurozone, Japan and China.
Europe Flirts With Recession
Global trade tensions are taking their toll, leaving Europe struggling for solutions.
Understanding Hong Kong, Monetary Easing, and Negative Rates
Unrest in Hong Kong and limitations of monetary policy have no easy solutions.
Challenging China’s Measurements and Exploring Confidence Measures
U.S. consumer confidence is high, but confidence in China’s economic measurements is not.
Short-Lived China Truce Gives Way To Greater Risk
What shifts from tariffs to currency mean in the US-China trade war.
A Long, Hot Summer
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
Weekly Economic Commentary: Regime Change
Change can threaten, but it can create opportunity if we adapt.
Global Economic Outlook - August 2019
The Northern Trust Economics team shares its growth outlook for the U.S., U.K., Eurozone, Japan and China.
India Confronts Its Challenges, China Shows Restraint, and a New ECB Leader Is Named
The decade of the 1990s in India was an era of rapid change. The sudden rise of new choices and shifts in consumer preferences was stunning, in hindsight.
U.S. Economic Outlook
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
China Trade Truce, Vietnam in the Spotlight
Talks are back on, but success is far from assured.
Growth Prospects and Challenges Ahead for the U.S., U.K., Eurozone, China, and Japan
A change to global uncertainty will require a concrete settlement of key issues . While downside risks to the global outlook have not increased, they haven’t declined, either.
Taking a Pulse of 2019
Trade tensions are felt around the world. Cautious central banks and flat yields don't stop a rally in equities. And more observations from a busy half year.
The Consequences of Aging Populations
The march of demographics may be slow, but it is sure. And while the consequences of aging may seem far off into the future, they will be substantial. Unless we address them now, they will become much less manageable later.
Previewing Next Week’s FOMC Meeting
How much longer can the Fed stay patient? We see a change coming.
Gale-Force Trade Winds
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
Tracking Trade Conflicts in Asia and Mexico
China and Mexico thought they made progress toward U.S. trade deals. No longer.
Growth Prospects and Challenges Ahead for the U.S., U.K., Eurozone, China, and Japan
The sudden escalation of trade tensions that have originated from Washington is casting doubt over the outlook. If the escalation continues, the global economy will continue to decelerate and recession risks will rise.
Risks From International Tensions Continue to Grow
Europeans went to the polls, and the results reveal continental divisions. U.S. businesses’ patience for tariffs won’t last. And what do tariffs do to prices?
A Deep Dive Into Productivity
Productivity growth is vital to the economy and for our well-being. We take a look at recent and long-run trends, marvel at the progress of artificial intelligence, and explore diverging growth among nations.
When Trade Talks Fail, No One Wins
What’s next for trade talks with China and the U.S.?, Emerging markets face the middle-income trap, CECL provides more insurance for the financial system.
Measuring Inflation, Celebrating Job Creation, and Watching Chinese Debt
Many factors are holding down inflation, U.S. jobs growth continues to surprise and China’s bad loans are getting worse.
Germany, Startups, and Inflation
Wie Gehts mit Deutschland?; Jump-Starting U.S. Startups; Big Data Is Changing Inflation
Growth Prospects and Challenges Ahead for the U.S., U.K., Eurozone, China, and Japan
The economic slowdown that began in late 2018 has started to stabilize. Trade tensions and policy uncertainty took a toll on confidence and financial markets late last year, but both seem less threatening today. Financial conditions have eased as major central banks maintain a fairly accommodative stance amid a subdued inflation outlook.
Negotiation and Ratification: Hurdles Remain for China Talks and the USMCA
We expect the USMCA to be ratified eventually. But it could take longer than anticipated, and the political environment across North America creates substantial uncertainty.
Tracking Public Costs: Fiscal Follies, the Strong Dollar, and Incarceration
Today’s government finances add to tomorrow’s problems; The strong U.S. dollar is a mixed blessing; Prisons are expensive for both taxpayers and inmates
Fed Candidates Cross a Line; Illinois Finds Its Way
The proposed nominations of Stephen Moore and Herman Cain to the board of governors threaten to compromise the Fed’s strong character. Both have been major fundraisers for the president, and both have pledged to use their posts on the Board to support the White House program. They seem intent on bringing a political agenda into a forum that tries to operate without one.
The Days Are Getting Longer
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
Uneven Recovery Brings New Attention to Old Ideas
Despite its name, MMT is not modern. It is the latest iteration of the idea of monetizing the debt, relying on a central bank to create demand for a country’s bonds. The Bank of Japan routinely buys all Japanese government bonds on the open market, keeping borrowing costs near zero despite a massive government debt. Japan has not imploded under this debt burden, but it has stagnated. Government intervention reduced a crisis, but did not unlock growth.
Global Economic Outlook - April 2019
Northern Trust’s Economic Research team shares its monthly perspective on the growth prospects and challenges ahead for the U.S., U.K., Eurozone, China, and Japan.
Global Growth Slows, Yield Curve Inverts, and Latin America Feels the Pinch
The Expansion’s Endgame?; Latin America: Caught In The Middle; What The Yield Curve Is (And Isn’t) Telling Us
Brexit Gets a Red Card, and the Fed Flattens its Dots
Brexit May-hem; Is the Dot Plot Shot?; Getting Kids to Finish College
Fed's Balance Sheet Runoff Will End, but ECB Isn't Finished
A New Normal For The Fed Balance Sheet; How Tariffs Work…and Don't Work; The ECB Goes Back To The TLTRO Well
Inconsistent Readings Reflect an Economy in Transition
The Northern Trust Economics team shares our view on growth, inflation, unemployment, and interest rates.
Climate Change Matters to Investors and Leaders
I was born too early to benefit much from Sesame Street, but I still loved The Muppets. Kermit the Frog was my favorite character; alternatively in full control and overwhelmed, Kermit struggled to make sense of the nonsensical. To this day, there are times that I feel confronted with the same challenge.
Bending, Not Breaking
The U.S. economy has shifted into a lower gear, growth has been falling in the Eurozone, Brexit is festering and China is feeling the heat from internal imbalances and an elevated trade spat with the U.S.
Fannie and Freddie Face Their Fates
GSE reform is in sight, China’s stimulus falls short, and bank mergers are back.
A Soft Landing
The Economics team explores a smooth economic slowdown, elevated consumer confidence, and troubles in Italy.
Was It All a Bad Dream?
The U.S. economy is finding its rhythm after an uncertain start to the year.
Taxes Are a Divisive Issue for Europe, Tax Returns After Tax Reform, Sympathy for the IRS
As we enter tax season, we explore the collection and use of individual income taxes.
Global Economic Outlook - February 2019
Northern Trust’s Economic Research team shares its monthly perspective on the growth prospects and challenges ahead for the U.S., U.K., Eurozone, China, and Japan.
Monetary Policy Versus Markets, Eurozone Growth Anxieties, The U.S. Government Shutdown: Month 2
Central banks face a difficult year. Eurozone economies are slowing. And the U.S. government shutdown can’t be ignored.
China Hits A Soft Patch, Brexit: The End Of The Beginning, Figuring Out Financial Conditions
Weakness in the Chinese economy is becoming clearer, while the way forward for Brexit is anything but clear. And what exactly does "tighter financial conditions" mean?
Making Sense of the Markets and Shutdown Shock
Markets struggle to price new risks, and the U.S. government shutdown grows in severity.
Global Economic Outlook - January 2019
Major economies are positioned to keep growing in the year ahead, but risks are mounting.
Tough times for the Fed, China negotiators, and Brexit
Several years into the recovery from the global economic crisis, the jobs of central banks have only become more difficult. How are indebtedness, inequality, inflation and instability contributing to their problems, and what can we expect from future interest rate decisions?
The World's Poor Preparation for Retirement
Private, public and international pension plans are all due for a reckoning.
An Educated Look At Student Debt
Senior Economist Ryan Boyle looks at how America accumulated so many student loans, and how best to deal with them going forward.
Brexit Drama Reaches A Fever Pitch
Dramatic events surrounding Brexit left Theresa May’s government balancing on a precipice. What are the economic implications? Later in the column, we examine U.S. drug prices and possible solutions to exploding costs.
Is The WTO Losing Relevance?
The World Trade Organization plays a crucial role in global trade. How essential is it, and what can we expect as trade tensions rise?
The Policy Effects of the U.S. Midterm Election
How will the results of the U.S. midterm elections be reflected in trade agreements, legislation and international relations?
Looking Past The Election
With unemployment low and wages rising as we enter the holiday season, consumer spending will continue to lead economic growth.
The Next Five Years
This week, we evaluate the potential near-term futures of nationalism, inflation, demographic shifts, emerging markets and the effects of prosperity. What trends can we expect to encounter?
What’s the Value of the IMF?
Is the International Monetary Fund a useful tool in preventing economic dysfunction? Or, as the nationalists claim, are there more appropriate uses of capital?
A Closer Look at Global Trade Agreements
With USMCA and Brexit negotiations, nations are reworking the world’s most fundamental trade agreements. How will these new treaties affect global relations?
The Costs of Change
What do a Nobel Prize, oil prices and employee compensation have in common? Change. The Nobel committee tipped its hat to the importance of recognizing climate change with its prize for Economic Sciences. But changes in oil’s global role and compensation vs. wages are also on our minds
Bull Steepening
Long-term bond yields are rising amid positive economic data and rising inflation.
A Closer Look at the Fiscal Woes of Illinois and Brazil
Both the U.S. state of Illinois and the nation of Brazil suffer from fiscal deficits that have been years in the making. How can these trends be reversed, and will the upcoming elections for each government contribute to a solution?
Global Economic Outlook - October 2018
Until this year, the global economy had been characterized by three years of strong, synchronized growth with subdued inflation—the “not too hot, not too cold” characteristics of a “Goldilocks” economy. Though global growth is still relatively resilient, inflation risk is clearly on the rise, driven by high commodity prices and tight labor markets.
Digging Deeper Into The Recovery After The Global Financial Crisis
This week, we look back at EU's recovery from the global financial crisis and the new normal of the US housing market. They have both recovered, but are we on the right path?
Really Ready for Retirement?
In the span of human history, retirement is a fairly new idea. Only a few generations ago, most of our ancestors could expect to work until the end of their lives. We are happy to report this is no longer the case. Improving longevity brings the opportunity for retirement, but also the responsibility for preparing. Unfortunately, many Americans have not handled this responsibility very well at all.
Global Economic Outlook - September 2018
Northern Trust’s Economic Research team shares its monthly perspective on the growth prospects and challenges ahead for the U.S., U.K., Eurozone, China, and Japan.
A Testing Time For Inflation Targeting
The Federal Reserve recently conducted its annual conference in Jackson Hole, Wyoming. Prominent on the agenda were discussions of inflation, or the lack thereof. Many central banks around the world have inflation targets, and have been frustrated by their inability to reach them.
Infrastructure Remains a Missed Opportunity
Infrastructure investment promises are politically popular, but actual funding has been slow to follow. Italy’s bridge collapse illustrates the real risks of putting off infrastructure projects. The shortage of truck drivers in the U.S. is driving inflation, and this labor market gap looks likely to last.
Turkey’s Month of Reckoning
This week, the NT Economic team covers the following topics:
- Turkey’s Troubles
- Should countries try to control capital?
- Labor markets work best when there are no guarantees
No Dog Days This Summer
The U.S. economy is going through a hot summer, but will cool off later this year.
India Works To Unlock Its Potential
The Northern Trust economics team explores India, recaps revisions to U.S. economic measurements, and gauges potential future economic growth.
Global Economic Outlook - August 2018
The Northern Trust Economics team shares its monthly perspective on the growth prospects and challenges ahead for key markets.
Preserve The Federal Reserve’s Independence
The Northern Trust Economics team tracks China’s fiscal policies and exchange rate volatility, and reacts to recent comments that undermine the Fed’s independence
The Fed's Balance Sheet May Remain Larger for Longer
The Northern Trust Economics team shares its outlook on the Fed’s balance sheet, the world's persistent preference for cash, and the challenge of measuring the gig economy.
Agriculture Around the World
The Northern Trust economics team explores agriculture markets globally and in the United States.
Trade Troubles: Too Soon To Tell
The Northern Trust economics team shares its outlook for US economic growth, inflation, unemployment and interest rates.
Trade Battles: Who Will Blink First?
The economics team surveys a variety of upcoming events: Mexican elections this weekend, trade battles in the coming months, and LIBOR sunsetting in the years ahead.
Trade Battles: Who Will Blink First?
The economics team surveys a variety of upcoming events: Mexican elections this weekend, trade battles in the coming months, and LIBOR sunsetting in the years ahead.
Viewing Trade Barriers From Both Sides
China is in focus this week as the economics team considers the country’s trade practices and defaults in its bond market.
The Fed Pursues Net Neutrality
What happened at the Fed and the ECB meetings? The economics team explains.
A Tale of Two Koreas
The team illustrates the economic background behind the Korean summit meeting and profiles corporate debt.
Threats Become Real
Strong growth and employment reports affirm Northern Trust’s positive outlook for U.S. economic performance in the rest of 2018.
Roman Roulette
The Northern Trust Economics team recaps the circumstances that led to this week’s drama in Italy and investigates a slowdown in U.S. business formation.
The Madness of Crowding Out
Public debt may be growing at the expense of private debt, the Chinese bond market is opening up, and important dates for tariffs are fast approaching.
Anticipating the Next Recession
In this issue, the Economics team looks at current recession risks in the U.S. and eurozone, and explores how rising oil prices will affect U.S. consumers.
The States Are Strapped
The Northern Trust economics team explores the risks of overstretched state and local governments, dramatic actions in Argentina and Turkey, and the recent difficulty of the carry trade.
From Slow to Symmetric
The Northern Trust Economics team forecasts U.S. economic growth, inflation, unemployment and interest rates.
Oil's Rise
Oil prices are rising. We explore the causes of this recent trend and the effects it will have on markets across the world.
A NAFTA Retrospective
This week, the economics team takes a look at NAFTA, past and present.
Ireland's Anxiety
In this issue, the Northern Trust economics team explores the challenges facing Ireland in Brexit, the continuing demand for eurozone debt, and wage growth within U.S. states.
Checks and Balances
How much debt is too much? [Carl/The Northern Trust Economics team] digests the outlook for debt across countries and levels of government, recaps the most recent outlook for the U.S. fiscal situation, and contrasts China’s current ascendance with the historical example of Japan.
You Break It, You Buy It
Northern Trust’s economic team recaps recent economic developments and shares our monthly outlook for economic growth, inflation, employment and interest rates in the United States.
Global Economic Outlook - April 2018
Northern Trust’s Economic Research team shares its quarterly perspective on the growth prospects and challenges ahead for the U.S., U.K., Eurozone, China, and Japan.
Grandmasters of Trade
This issue contains a deeper look into the competitive strategies at play in the current U.S.-China tariff feud, the drivers of the recent upturn in U.S. homeownership, and the market for Japanese government bonds.
One Year Until Brexit
One year away from its deadline, Brexit is already shaping up to be an expensive arrangement. Strong U.S. employment makes us question the “natural rate” of unemployment. Do aging populations increase or reduce inflation? Time will tell.
Automation And Inflation: An Uncertain Linkage
In many respects, economists are a little unusual. We think in odd ways, and we arrange data into odd patterns. We find it hard to reach conclusions without significant equivocation.
Further Thoughts On Trade Policy
We’ve written about the American steel tariffs in each of the last two weeks. But there remain some important points to make on the topic of trade.
Policy Departures
We may come to view February 2018 as a turning point for the U.S. economy. For the first nine years of the current expansion, fiscal policy was constrained and trade policy was measured. During the past month, the two have moved with more force, raising important questions about the outlook.
Trying Tariffs
The White House has announced a new set of broad tariffs on steel and aluminum imports. The measure is surprising in its scope, its targets and its break from the long-prevailing trends of international trade.
Tariffs Put Markets on Alert
This week, the White House signaled its intention to place punitive tariffs on imports of steel and aluminum. Markets and analysts reacted quickly, and negatively.
Budget Busting
U.S. fiscal policy has become unmoored, and it will be difficult to steer it safely back to shore.
Fanning the Flames
I am a traditionalist when it comes to outdoor cooking: wood and charcoal are the only suitable fuels.
Reflation and Reflection
It is said we should be careful what we wish for, because we just might get it. Beginning late last week, stocks finally stepped back. Market declines of 5% and even 10% occur with some regularity, even in the midst of long bull intervals
Focus on Fundamentals
For several years, the U.S. economy has produced a “Goldilocks” combination (neither too hot nor too cold) of solid growth with limited inflation. The absence of price pressures, even at very low levels of unemployment, has surprised many observers.
Freddie, Fannie, Finis?
Given the events of a decade ago, 2018 promises to be a year filled with reminiscence. Chroniclers will recall the signs of the gathering storm: falling U.S. house prices, rising mortgage defaults and spreading institutional failures.
Monetary Targets and Tactics
Most central banks have targets, too. And judged solely by the numbers, monetary policy would be assigned a substandard rating.
This Week: The Tale Of Tax Reform
We’ve been doing some de-cluttering at my house, adapting to life as empty nesters. During a review of some long-forgotten storage bins, I found the very first tax return I ever filed. It listed income of less than $2,000, earned lifeguarding and shelving books at the campus library.
Global Economic Outlook - January 2018
As it is for people, so it is for business cycles, which can become more vulnerable as they continue. This theory will certainly be tested in 2018. The global economy enters this year with considerable momentum and lots of policy support.
This Week: The Spirit of the Season
The economic news this year could scarcely have been better. Strong growth, low inflation and rising asset prices in major markets will make 2017 one of the most successful years in recent memory.
A Taxing Time
There has been no let-up to the economic news cycle this year. Even the approach of the holiday season has failed to offer a respite, with tax reform deliberations ongoing through the holidays.
This Week: Themes of 2017
Times have changed, in more ways than one. This December has been especially hectic, with the transition in Brexit negotiations, U.S. tax reform debate and Bitcoin setting new highs every few minutes.
How Should The Fed React To Tax Reform?
Is There Slack Left in the U.S. Labor Market?
Things We Are Thankful For
We’re thankful for this year’s economic growth in the U.S., which has exceeded most expectations. A soft first quarter has been followed by two quarters in which real activity expanded at an annual pace exceeding 3%.
Still Laboring
Valuation Sensitivity
Has the stock market gotten too expensive? Overall, we would say it hasn't. But we do feel some sectors are better positioned than others.
Is The Timing Right For Tax Reform?
The elimination of personal exemptions is one of many features of the tax reform proposal presently being debated in Washington. If passed, the new regime would realign the finances of industries, households and even countries.
Performing Under Pressure
This month's forecast follows a wave of generally positive economic data that appeared to shake off the weather-related disruptions seen throughout the summer and early fall.
China’s New Nationalism
Puerto Rico: Left On An Island
The current situation in Puerto Rico cannot be fully understood without a bit of a history lesson.
Blown Away
As expected, this month's forecast was a little more difficult to assemble. The influence of severe storms on economic activity and economic data made it harder to discern fundamental trends.
The Middle East Prepares for Economic Disruption
All cultures have the challenge of balancing the past and the present. But nowhere is the contrast between the two more apparent than in the Middle East.
Misbehavior Complicates Economic Outcomes
We would do well to heed the teaching of behavioralists as we craft solutions to some of today’s thorniest problems.
The Tipping Point for Central Banks
The Parable Of The Broken Window
Storm and Stress
The German phrase Sturm und Drang (literally: storm and stress) describes situations that become especially dramatic. This seems an apt expression to describe both the immediate past and the near future for the United States economy.
Reflections on the Houston Hurricane
The Fading Light of Monetary Policy
The eurozone has been the brightest star on this year’s economic horizon. The region’s output expanded at a 2.5% pace during the second quarter and has been rising continuously for 48 consecutive months.
Policy Antidotes to Rising Drug Prices
Pharmaceutical costs represent about 10% of total U.S. health care expenditures, or about $325 billion each year.
Why Are U.S. Wages Stuck In A Rut?
Why Are U.S. Wages Stuck In A Rut?
Supply and demand theories suggest worker scarcity would increase the price paid for labor. This has certainly been the case during recent American expansions, when annual wage gains topped 4%.
Will Bond Markets Need Saving?
Automation and Anxiety
French Revolution
The U.S. Labor Market Through A Different Lens
Mid-Year Musings
Global Economic Outlook - July 2017
Global economic activity has generally been good during the first six months of 2017. Europe’s renewed momentum has been a highlight for the developed world, and China’s steady growth has compensated for faltering elsewhere in emerging markets.
Europe Is On The March
The United Kingdom Faces a Rising Degree of Difficulty
Will High-Rises Come Down to Earth?
Blinders On
Uncertainty about U.S. fiscal policy changes persists. Tax cuts and infrastructure spending proposals are on the table, but they are unlikely to be enacted in 2017. We continue to maintain skepticism about the timing and size of the fiscal policy boost to economic growth. In the meantime, the expansion continues on, unperturbed.
Blinders On
Uncertainty about U.S. fiscal policy changes persists. Tax cuts and infrastructure spending proposals are on the table, but they are unlikely to be enacted in 2017. We continue to maintain skepticism about the timing and size of the fiscal policy boost to economic growth. In the meantime, the expansion continues on, unperturbed.
We Should Be Giving More Credit to Students, Not Less
Seniors and their families approach this milestone with a mix of pride and trepidation. Pride arises from the achievement of heightened status within the community of educated women and men. But there is trepidation about what lies ahead at the next level.
Interesting Times In Asia
A Spring Revival of Economic Growth
Incoming “soft data” and “hard data” conveyed vastly different U.S. economic conditions as the first quarter unfolded.
A Body Check to U.S./Canada Relations
My timing in life is terrible. When I book a flight, cumulus clouds immediately begin plotting to cover the destination on the appointed day. When I plan a special menu for a dinner party, the supermarket runs out of a key ingredient.
The Fed Contemplates the Great Reduction
Having accumulated a massive portfolio of securities during its quantitative easing (QE) program, the Fed has now arrived at a point where reduction is appropriate. But trimming the weight of monetary accommodation may not be easy.
Will the French Election Prove Revolutionary?
Keeping a Cap on Oil Prices
The Organization of Petroleum Exporting Countries (OPEC) has lost its grip on global production, with the United States (among others) rising to become a significant source of output.
Soft Data for the First Quarter, Firming Thereafter
U.S. political issues have dominated the economic headlines for the past month. The failure of the Republican-led House of Representatives to repeal and replace the Affordable Care Act delays consideration of tax reform and infrastructure spending.
Emerging Monetary Divergence
Over the last decade, a combination of unprecedented global financial integration and unconventional monetary policy in global financial centers created new challenges for central banks in emerging markets (EM).
Global Economic Outlook - April 2017
The world’s major economies have performed quite well in recent months despite the influence of political and policy upheaval. Brexit and the outcome of the U.S. election have yet to produce the negative outcomes some had feared.
Political Reality Trumps Policy Ambition
The effort to replace the Affordable Care Act (ACA) was an important test for Washington. Congress had elected to take up this debate first, for both procedural and symbolic reasons.
Bring On Brexit
Global Supply Chains Contain Inflation
The Fed's Window of Opportunity
The Federal Reserve spent a good portion of last year talking tough about raising rates, only to back away at several turns when intimidated by international uncertainty.
Animal Spirits Are High, But the Forecast is Stable
The outlook for the U.S. economy is nearly unchanged from expectations at the start of the year. Congress will address tax cuts and infrastructure spending only after passage of an updated health care law.
If You Build It, Will They Come?
Today, it seems as if there is a mysterious voice speaking to politicians all over the world, urging them to build.
Policy Uncertainty Looms Large
An Economic Look at Deregulation
NAFTA’s Complicated Legacy
Fuzzy Math on Fiscal Policy
Cash to Chips, Bricks to Clicks
Playing Chess With China
Positive Backdrop for Growth in 2017
The economic setting within the United States as the new year commences is largely constructive. Data received in the latter weeks of 2016 were encouraging, and there seems to be an improving economic sentiment.
Global Economic Outlook - January 2017
U.S. Job Report: The Wage Bill Comes Due
The first significant U.S. economic release of the new year was a solid one. The U.S. Department of Labor reported this morning that 156,000 new jobs had been created in December.
Highlights of the Year
FOMC Preview: Getting Ready for the New Regime
As the Federal Reserve prepares for its final monetary policy gathering of 2016, it will look back on a year of inactivity and look forward to a year that could very well be an active one.
FOMC Preview: Getting Ready for the New Regime
The Bond Market’s Ballot
The U.S. bond market has retreated since the election. Long-term yields have risen by almost 40 basis points. It appears that the 30-year-old bull market in bonds is really over.
Election Outcome Promises Change
Needless to say, the surprise victory of Donald Trump in the U.S. presidential election has changed the economic outlook on many fronts.
An Economic Analysis of the U.S. Election
A mistake many in my profession have made in the past year has been underestimating the difference between overall economic performance and its translation to the fortunes of constituents. This was at the heart of the Brexit vote last June and was the driving force behind yesterday’s U.S. outcome.
The Two Faces of the U.S. Labor Market
Trying to Avoid a Bad Trade
Global Economic Outlook - October 2016
At the three-quarter pole, the global economy is muddling through a disappointing 2016. Growth in developed and emerging markets continues, but at a pace that has fallen short of expectations.
Breaking Up Is Hard to Do
A Taxing Campaign
A Resilient Economy
There were concerns throughout the summer that U.S. economic conditions had weakened. Based on incoming reports, though, the weight of economic evidence remains positive.
