This Week's State Of The Economy - What Is Ahead? - 10 November 2023

By: Taro Chellaram /Wells Fargo Economics & Financial Report/Nov 16, 2023

This Week's State Of The Economy - What Is Ahead? - 10 November 2023

The phrase “long and variable lags” coined by Milton Friedman refers to the difficulty of gauging precisely when higher interest rates will negatively affect economic growth. It is a maddeningly difficult thing to measure. During a press conference following the November 2022 FOMC meeting, Federal Reserve Chair Jay Powell used the word “lag” or some variation of it a combined 17 times as he pledged policymakers’ vigilance to monitoring it.

Sometimes, the impact of higher rates is quite obvious, such as the series of bank failures that occurred earlier this year. Other times, the impact of higher rates is harder to tease out and is not measured in an objective, quantifiable way like some bellwether indicators, such as the monthly jobs number or the core rate of PCE inflation. As it weighs policy decisions, the Federal Reserve seeks to better understand these more subtle ways that higher rates can creep into the economy. One of the more widely overlooked monitoring tools is a survey, conducted by the Fed, of up to 80 large domestic banks and 24 U.S. branches and agencies of foreign banks. Because this survey is a vital input for the FOMC meetings, it is conducted quarterly so that results are available for the January/February, April/May, August and October/November FOMC meetings.

Sometimes, a performance is so electrifying it demands an encore. Known at the FOMC and among its fan base of econ enthusiasts as the Senior Loan Office Opinion Survey (or SLOOS, for short), this indicator has the rare characteristic of additional, off-cycle releases. The Federal Reserve is known to occasionally conduct one or two additional surveys throughout any given year. Questions are intended to turn over every stone in an attempt to identify those variable lags influencing policy. These include changes in the standards and terms of the banks' lending as well as the state of business and household demand for loans. The survey can, and often does, include questions on one or two other topics of current interest.

 




This Week's State Of The Economy - What Is Ahead? - 28 February 2020

The COVID-19 coronavirus hammered financial markets this week and rapidly raised the perceived likelihood and magnitude of additional Fed accommodation.

This Week's State Of The Economy - What Is Ahead? - 25 February 2022

What a crazy week. It’s hard to worry about something as relatively unimportant as economic trends when one thinks about what folks in Ukraine are enduring, but economies are nonetheless impacted.

This Week's State Of The Economy - What Is Ahead? - 17 January 2020

Mild weather helped housing starts surge 16.9% in December to a 1.61 million-unit pace, the highest in 13 years. Manufacturing surveys from the New York Fed and Philadelphia Fed both rose more than expected in December.

This Week's State Of The Economy-What Is Ahead?

How will Fed rates-cut and Trump 10% tariff on $300 Billion Chinese Goods countered by Chinese currency devaluation against Dollar, affect inflation and economic slowdown in US economy?

This Week's State Of The Economy - What Is Ahead? - 04 December 2020

Manufacturing held up relatively well in November, despite a larger-than-expected dip in the ISM manufacturing survey. The nonfarm manufacturing survey rose slightly.

This Week's State Of The Economy - What Is Ahead? - 30 July 2021

Despite a few misses on the headline numbers, economic data this week highlighted a theme of demand continuing to outstrip supply and ongoing slack in the labor market.

This Week's State Of The Economy - What Is Ahead? - 04 September 2020

Employers added jobs for the fourth consecutive month in August, bringing the total number of jobs recovered from the virus-related low to 10.5 million.

This Week's State Of The Economy - What Is Ahead? - 22 October 2021

Restrictions from a renewed COVID outbreak in China, regulatory changes weighing on local financial markets and a potential collapse of Evergrande have all contributed to a slowdown in Chinese economic activity.

This Week's State Of The Economy - What Is Ahead? - 23 October 2020

A recent strong report from the National Association of Homebuilders set the tone for another round of strong housing data. The NAHB index rose two points to a record high 85.

This Week's State Of The Economy - What Is Ahead? - 08 October 2021

September\'s disappointing employment report clearly takes center stage over this week\'s other economic reports. Nonfarm employment rose by just 194,000 jobs, as employers continue to have trouble finding the workers they need.


Instagram

@ tcgcrealestate

Subscribe Now! IT's Free

Stay up to date with all news coming straight in your mailbox.

Copyright © 2024 TC Global Commercial. All rights reserved.