Research
Tip: To personalise the research list, click the gear symbol above.


Choose type:


Macro Comment US

Macro Comment US — Limited need for Fed balance sheet reduction

We argue that the Fed will likely stick to its current "floor" policy regime. That implies that the Fed needs a balance sheet of at least USD 2,900bn today and USD 4,000bn in ten years, which indicates that a sharp reduction of the USD 4,500bn balance sheet is not urgent. The Fed plans to start unwinding its balance sheet later this year before Chair Janet Yellen's term ends in February next year. However, we expect the reduction to take place very gradually, with the Fed probably aiming for a reduction of USD 500bn over the first five years.

Petter Lundvik, Economist | pelu16@handelsbanken.se

Macro Comment US — Trump unlikely to lift growth permanently

GDP growth seems to be slightly above its potential rate, which would decrease unemployment further. Low productivity growth and an already overheated labour market would likely curb growth ahead. In our view, Trump's fiscal policy stimulus would only trigger a short-lived economic expansion followed by an economic slowdown. To avoid jeopardising growth, the Fed will likely keep its prevailing cautious interest rate strategy.

Petter Lundvik, Economist | pelu16@handelsbanken.se

Macro Comment US — Fed increases rates and raises its rate forecasts

The Federal Reserve decided to increase rates by 0.25 percentage points at the December meeting. It also raised its forecasts for the federal funds rate. The Fed forecasts three rate increases of 0.25 percentage points each in 2017, 2018 and 2019, compared to its previous forecast in September of two increases in 2017 and three in 2018 and 2019. However, we do not believe that the Fed will deliver in line with its interest rate forecast. The Fed has postponed rate increases before and will likely continue to deliver less than promised.

Petter Lundvik, Economist | pelu16@handelsbanken.se

Macro Comment US — Payrolls of 178,000 support a rate hike in December

Non-farm payrolls in November were in line with expectations, increasing by 178,000. The unemployment rate declined unexpectedly to 4.6 percent, whereas hourly earnings fell by 0.1 percent, which was signifi-cantly weaker than expected. We keep our view that the next increase in the federal funds rate will take place in December. Financial markets agree and now fully price in such a rate hike.

Petter Lundvik, Economist | pelu16@handelsbanken.se

Global makrokommentar USA — Ekonomiska konsekvenser av presidentvalet

Trumps förslag att deportera elva miljoner illegala invandrare skulle, om det genomförs, skada ekonomin. Frågan är om han verkligen är beredd att genomföra något så dramatiskt? Eventuellt ska hotet om utvisningar och höga tullar för Mexiko och Kina ses som ett förhandlingsutspel, som förutom att öka hans segerchanser också kan tvinga fram internationella eftergifter. Utvisningar och tullar skiljer kandidaterna åt och förklarar varför tillväxten är högre för Clintons valprogram än för Trumps.

Petter Lundvik, Economist | pelu16@handelsbanken.se

Macro Comment US — Payrolls up 156,000 in September

Non-farm payrolls in September were weaker than expected and increased by 156,000. The unemployment rate increased unexpectedly to 5.0 percent, whereas hourly earnings rose by 0.2 percent, which was also weaker than expected. We keep our view that the next increase in the federal funds rate will take place in December. Financial markets agree and now price in a 62.6 percent's chance of a rate hike in December.

Petter Lundvik, Economist | pelu16@handelsbanken.se