Northern Trust

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.
Economic Commentary: Digital Currencies, Mortgage Forbearance, Pets

Central banks will go digital, and homeowners avoided foreclosure.
Economic Commentary on Inflation: Base Effects, Supply Chain Disruptions and Aging Populations

Addressing technical, idiosyncratic and structural aspects of inflation.
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.
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.
Economic Commentary: Vaccination, Stimulus, Agriculture

Faster vaccination and bigger stimulus can pave the way to a better year, and agriculture subsidies upset trade relationships.
Economic Commentary: Senate, Stimulus, and Brexit

The Senate outcome opens the door to future cooperation, while Brexit sets the stage for future frictions.
Dark Before The Dawn

Policymakers around the world share the challenges of containing the renewed outbreak and supporting those affected by it.
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.
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.
Climate Considerations, Regulatory Shifts, and Debt Investment in China

The environment is one of many sets of regulations under consideration.
Recovery Changes Seasons

With COVID-19 cases rising and policy support fading, the recovery faces many risks.
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.
Government Debt Grows, Liability Risks Rise, and Women Shoulder the Burden

COVID-19 causes growth in government debt, liability risks, and stress for women.
How COVID-19 Will Change Our Daily Lives
How will our lives change during and after the pandemic? Let’s start with a look at education, medicine, automation, broadband access, city living and cash.
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.
Addressing the Class of 2020, Europe’s Slow COVID-19 Response, U.S. Households Struggling
The pandemic is putting universities and their graduates to the test.
Lives and Livelihoods - May 2020
Major economies are easing restrictions to reboot economic activity. Unfortunately, they are faced with a difficult tradeoff between lives and livelihoods.
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.
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.
Policy Responses Take Shape, Emerging Markets at Risk, and Why We Hoard
Growing policy responses reflect greater estimates of the costs of COVID-19.
COVID-19 Brings Policy Responses, Risks to Emerging Markets, and Hoarding
Growing policy responses reflect greater estimates of the costs of COVID-19.
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.
Problems Solved?
Brexit and trade talks provided lots of uncertainty this year. Last week saw progress on both fronts.
Closing Strong
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
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.
Argentina and the IMF’s Love-Hate Relationship, Little to Celebrate in Washington, Gaining Leverag
Testing times for relations in this challenging epoch.
October Global Economic Outlook
October will be a telling month for Brexit, the eurozone economy and the U.S.-China trade war.
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.
Stage is Set for a Rate Cut, while Trade Contagion Spreads to Japan and Korea
This week the economics team discusses: Surveying fiscal conditions as the FOMC prepares to meet; Japan gets aggressive in trade with South Korea; and One less fiscal worry for the U.S.
Auto Markets the U.S., Germany and China
Demand for cars is both slowing and shifting. How will automakers adapt?
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.
Stretching Our Legs
Rumors of a contraction to start the year were overblown. Since March, a string of positive economic headlines have helped soothe investor sentiment and maintain economic momentum. We are still in a growth cycle with room to run.
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.
Shifting Strategies in Site Selection, China Trade Negotiations, and Inflation Targeting
Amazon HQ2 shows the limits of local economic development incentives; China and the U.S. break through a wall in negotiations; and The Fed ponders new approaches to inflation targeting
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.
Gear Up for Lower Gear
The global economy looks set to move into a lower gear as both advanced and emerging economies will find it hard to extend their recent robust economic performance into 2019.
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.
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?
Learnings from Lehman Brothers
Reflecting on ten years since the Lehman Brothers bankruptcy: Households have reduced their borrowing, but governments haven’t. Debates over the response to the financial crisis may never end. Non-bank lenders have thrived while managing their risks.
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.
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.
Frequently Asked Questions About Trade, Interest Rates, Brexit, and More
The Northern Trust Economics team addresses a variety of questions heard most often from our audiences.
Global Economic Outlook - July 2018
The Northern Trust Economics team shares its outlook for growth, employment, inflation, and interest rates in the U.S., U.K., E.U., Japan and China.
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.
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.
Currency Kerfuffle
For more than a year, the U.S. Dollar (USD) has been losing value relative to most other currencies. When asked about this trend this week in Davos, U.S. Secretary of the Treasury Steven Mnuchin seemed unconcerned, and even supportive.
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.
Meet The New Boss
Tax Cut Calculus Remains Complicated
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%.
Temperatures Rising
Warm temperatures prevail in most of the United States at the moment, a trend that is mirrored in recent economic data. We don't expect conditions to cool as autumn approaches.
Monetary Policy Rules: Revisited
Monetary Policy Rules: Revisited and Giving Japan Credit
Will Bond Markets Need Saving?
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
China's Trilemma
On the surface, China continues to outperform expectations. It has sustained a high rate of economic growth for longer than most other developing countries.
What Does It Mean To “Buy American?”
In this commentary we will summarize:
- What Does It Mean To “Buy American?”
- European Populists Lost, But Their Spirit Lives On
- The ECB Is Right To Stand Pat
A Spring Revival of Economic Growth
Incoming “soft data” and “hard data” conveyed vastly different U.S. economic conditions as the first quarter unfolded.
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.
The Fed’s Rationale for Raising Rates
The World Can’t Afford to Retire
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
Decision Day for Italy
The View From Far Away
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.