James Knightley

Incoming President Trump promises higher growth in 2026 and beyond? No, he doesn't. And the UK won't raise taxes any further? Yes, it will.

We got another 25bp policy rate cut from the Fed, but updated projections and Chair Powell’s press conference confirms that the Fed is going to be much more cautious next year with sticky inflation and President Trump’s policy mix meaning a higher hurdle is required to justify rate cuts in 2025

The consensus is for US non-farm payrolls to have risen 153k in December while the unemployment rate is expected to hold at 4.2%. This would be consistent with a general cooling of the jobs market. Data from Hungary and the Czech Republic, meanwhile, may show unemployment ticking up

After languishing for much of the past two years, both the production and new orders components of the ISM manufacturing report have moved into growth territory

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Market pricing of potential Fed rate cuts continues to soften in the wake of robust data

Our economists take a look at recent developments in the US, Asia and Europe, as well as in FX, commodities, central banks and rates

Yet another upside surprise on US jobs numbers will intensify the belief that Federal Reserve officials are under no pressure to cut interest rates in the near term. We will get the benchmark jobs revisions next month, which could change the story, but in an environment of sticky inflation the risks are increasingly skewed towards an extended pause from the Fed

After four consecutive 0.3% MoM prints, December's core inflation figure posted an improved 0.2% outcome. Nonetheless, the trend remains too hot for comfort and the Fed is likely to extend its well telegraphed pause in rate cuts beyond March. The run-up in Treasury yields and the stronger dollar will provide headwinds to growth and we still look for three 25bp rate cuts in 2025

The Bank of Canada is widely expected to cut rates on 29 January with a 25bp move looking as the most likely outcome amidst tepid growth, benign inflation and an unemployment rate that’s trending higher. US trade tensions present downside risks to growth and could force the BoC to cut deeper later this year. For now, CAD will anyway continue to respond almost only to Trump's tariff threat