Daily Archives: Aug 24, 2018 at 07:51 am EST

Will The Narrowing Yield Curve Force The Fed To Rethink Policy?

The difference in the widely followed spread in 10- and 2-year Treasuries slipped to 21 basis points on Thursday (August 23), marking yet another 11-year low, based on daily data via Treasury.gov. The narrowing gap is stoking debate about whether a new recession is near and the wisdom of what’s expected to be another rate hike by the Federal Reserve next month. Based on current data, however, the economic data continues to reflect a healthy macro trend for the US. The question is whether various risks on the horizon, including a US trade war with China, will delay or even derail the central bank’s plans for higher rates?
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Macro Briefing: 24 August 2018

Arctic’s “last bastion” of sea ice is melting: USA Today
US-China trade war set to roll on despite latest talks: Bloomberg
China’s foreign minister: counter-strikes to US trade tariffs will continue: Reuters
Fed warns that escalating trade war is a threat to economy: CNN Money
New US home sales fell to 9-month low in July: CNBC
House prices in US rise at slowest pace in four years: HousingWire
Economists expect US durable goods orders for US will slump in July: Econoday
US jobless claims point to continue strength in labor market: Reuters
Eurozone Composite PMI ticks up to 2-month high in August: IHS Markit
PMI data shows that US private-sector growth slowed in August: IHS Markit