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Joe Brusuelas @joebrusuelas.bsky.social · 2d

Good Evening

Joe Brusuelas @joebrusuelas.bsky.social · 2d

A word on why the central bank monetary transmission mechanism is resulting in a longer lag between rate cuts & positive impact on the real economy. #Econ #EconSky

Source: The Real Economy Blog

realeconomy.rsmus.com/market-minut...

Market Minute: Rate cuts are taking longer to have an impact

The lag time between rate cuts and when those cuts are felt in the real economy is increasing, whether it’s in consumer spending or businesses taking on more risk.

realeconomy.rsmus.com

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Joe Brusuelas @joebrusuelas.bsky.social · 2d

Yields are on the rise in France today as political risk in Paris moves to the forefront of investor concern. The inability of the political actors across the G-7 to put their economies on a sustainable fiscal path is yielding a higher cost. #Econ #EconSky

realeconomy.rsmus.com/the-rise-of-...

The rise of debt in the G-7 nations

Government debt among six of the seven countries in the G-7 will exceed 100% of gross domestic product this year. Is it sustainable?

realeconomy.rsmus.com

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Joe Brusuelas @joebrusuelas.bsky.social · 5d

If the peso were to collapse another default will become a viable option in Buenos Aires. Lending into such conditions is inherently risky and no one would be surprised to see the government attempt to renegotiate its debts once again. #Econ #EconSky

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Joe Brusuelas @joebrusuelas.bsky.social · 5d

A look at the real broad effective exchange rate implies that initial policies pursued by Milei has run its course and they are now experiencing another currency crisis as capital flight has begun yet again. #Econ #EconSky

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Joe Brusuelas @joebrusuelas.bsky.social · 5d

If the U.S. is going to tap the $219 billion Exchange Stabilization Fund to finance a bailout-estimated to be at $20 billion- these are two fundamental requirements for this to move forward. #Econ #EconSky

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Joe Brusuelas @joebrusuelas.bsky.social · 5d

If there is a bailout the peso needs to float freely without manipulation by the Argentinian government and Buenos Aries needs to put up collateral in much the same fashion that Mexico did back in 1995. #Econ #EconSky

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Joe Brusuelas @joebrusuelas.bsky.social · 5d

Thus, global investors are testing both the intent and will of the US and IMF to put forward another bailout of Buenos Aires. #Econ #EconSky

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Joe Brusuelas @joebrusuelas.bsky.social · 5d

Argentina Bailout, Conditionality and Collateral: The U.S. verbal intervention to prop up an overvalued Argentinian peso-it needs at least a further 25% depreciation- has run its course & the peso is depreciating again. Yes, that means higher inflation in Argentina is inevitable. #Eco #EconSky

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Joe Brusuelas @joebrusuelas.bsky.social · 5d

Good morning. A look at dollar dominance even as global investors hedge their exposure to the greenback. #Econ #EconSky

Source: The Real Economy Blog

realeconomy.rsmus.com/market-minut...

Market Minute: As dollar dominates FX, investors hedge exposure

The dollar was on one side of 89% of all international transactions, which is an increase from its 88% share in 2022.

realeconomy.rsmus.com

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Joe Brusuelas @joebrusuelas.bsky.social · 6d

Good morning. The US government shutdown a risk to further deterioration in consumer confidence.

Source: The Real Economy Blog

realeconomy.rsmus.com/market-minut...

Market Minute: Shutdown adds risk to waning consumer confidence

Surveys of how consumers view the economy dropped in September. The government shutdown could worsen consumers’ views of the economy.

realeconomy.rsmus.com

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Joe Brusuelas @joebrusuelas.bsky.social · 7d

It’s the fact that the upper 10% of households are responsible for almost 50% of spending & AI investment sends equity indices higher. Together they are a strong tailwind to the economy. The result is a K-shaped economy and growing economic inequality.

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Joe Brusuelas @joebrusuelas.bsky.social · 7d

Getting ready to appear on @BloombergTV with @mattmiller1973 to discuss the US government shutdown and the sagging prospects of the American labor market. See you at 10:30AM ET.

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Joe Brusuelas @joebrusuelas.bsky.social · 7d

Why are small & medium size firms reducing headcount: it’s policy uncertainty. Lack of clarity on the cost of doing business is now weighing heavy on hiring. It’s a rational response to a fog of uncertainty.

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Reposted by Joe Brusuelas

Carl Quintanilla @carlquintanilla.bsky.social · 7d

RSM: If the shutdown lasts into the BLS reference week (Oct 12-18), “furloughed workers would be counted as unemployed, which would send the unemployment rate higher, toward 4.5% to 4.7%.”

@joebrusuelas.bsky.social

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Joe Brusuelas @joebrusuelas.bsky.social · 7d

It hits the dollar first. If it approaches two weeks-i.e. people stop getting paid-then you will start seeing it in yields. Other than that it’s just daily vol

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Joe Brusuelas @joebrusuelas.bsky.social · 7d

There is no way to sugar coat this. Hiring is at risk as businesses simply see uncertainty increasing and are acting appropriately. Given that the government shutdown & threats of mass firings permeate the latest edition of the fiscal follies this is all not conducive to the payroll outlook.

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Joe Brusuelas @joebrusuelas.bsky.social · 7d

ADP Payroll Estimate: The internals indicate that small and medium size firms have stopped hiring. Small firms shed 40K jobs and medium sized firms let go of 20K individuals. Large firms hired 33K. By sector good produces let go of 3K and service producers 28K. #Econ #EconSky

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Joe Brusuelas @joebrusuelas.bsky.social · 7d

….trade and immigration as well as longer term demographic issues adversely impacting labor supply.

This will bolster the case for a October rate cut from the Federal Reserve. On the publication of the data the probability of a rate cut increased to 95%. #Econ #EconSky

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Joe Brusuelas @joebrusuelas.bsky.social · 7d

US ADP Estimate of Private Sector Employment: an decline of 32,000, in addition to a downward revision in the August estimate to a decline of 3,000 which tends to suggest that the private sector is pulling back on hiring at a quicker pace due to policy uncertainty around….#Econ #EconSky

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Joe Brusuelas @joebrusuelas.bsky.social · 7d

The latest edition of the American Fiscal Follies kicked off at midnight on Wednesday. Here is a look at the near term costs of the 22nd government shutdown over the past half century. #Econ #EconSky

Source: The Real Economy Blog

realeconomy.rsmus.com/market-minut...

Market Minute: The costs of a government shutdown

An extended shutdown would raise the unemployment rate, reduce household consumption and restrain economic growth.

realeconomy.rsmus.com

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Joe Brusuelas @joebrusuelas.bsky.social · 8d

My discussion on the economic impact of the US government shutdown which begins tonight at midnight. #Econ #EconSky

Source: YahooFinance

ca.finance.yahoo.com/video/us-gov...

Routine gov't shutdown woes, inflation are exhausting consumers

Vice President Vance anticipates that a government shutdown is likely as US lawmakers scramble to try to come to a compromise on a spending bill ahead of the midnight deadline. A shutdown would suspen...

ca.finance.yahoo.com

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Joe Brusuelas @joebrusuelas.bsky.social · 8d

Going to be on @YahooFinance at the top of the 10AM ET hour to discuss the economic impact of the likely US government shutdown

Joe Brusuelas @joebrusuelas.bsky.social · 8d

Good morning. As the US government prepares to shutdown at midnight a look at lack of fiscal sustainability across the G-7. #Econ #EconSky

Source: The Real Economy Blog

realeconomy.rsmus.com/the-rise-of-...

The rise of debt in the G-7 nations

Government debt among six of the seven countries in the G-7 will exceed 100% of gross domestic product this year. Is it sustainable?

realeconomy.rsmus.com

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Joe Brusuelas @joebrusuelas.bsky.social · 9d

Our provisional September US jobs report forecast is for an increase of 70K & a 4.3% unemployment rate. I expect the initial 22K August estimate to be revised upward. #Econ #EconSky

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