United States: Light data week, soft landing?

Summary

United States: Light Data Week, Soft Landing?

• Beyond Chair Powell's interview on Tuesday, it was a light week for economic news. The U.S. trade deficit widened to $67.4 billion at the end of last year, revolving consumer credit increased at its slowest pace since 2021 in December and year-ahead consumer inflation expectations jumped to 4.2% in February.

• Next week: NFIB (Tue), CPI (Wed), Retail Sales (Wed)

International: International Central Banks Deliver Another Round of Rate Hikes

• This week saw another round of rate hikes from global central banks. The Reserve Bank of Australia (RBA) got the ball rolling with a 25 bps policy rate hike, to 3.35%. Given hawkish comments, we expect the RBA to follow up with 25 bps hikes in both March and April. Sweden's central bank hiked rates 50 bps and signaled a further increase in the spring, while adding it would also start selling bonds to shrink its balance sheet at a faster pace. Mexico's central bank surprised with a larger-than-forecast 50 bps policy rate hike to 11.00%, while the Reserve Bank of India also raised interest rates this week.

• Next week: Japan GDP (Tue), U.K. CPI (Wed), Australia Employment (Thu)

Credit Market Insights: Worsening Credit Conditions: Good News for the Fed?

• The latest Senior Loan Officer Opinion Survey (SLOOS) revealed widespread demand deterioration and tighter credit standards across all loan types in the last three months of 2022. The decline in credit conditions is emblematic of the broader effects of restrictive monetary policy starting to take hold.

Topic of the Week: Heading South: Sun Belt on the Rise

• Recent blockbuster NBA trades are emblematic of broader migration trends occurring in the United States. Between 2021 and 2022, Census Bureau estimates indicate that nine of the top 10 states receiving the highest number of domestic migrants were within the Sun Belt.

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