Principal Knowledge Center

There are two key central bank meetings this week: the Federal Reserve meeting ends Wednesday, June 13 and the European Central Bank (ECB) meets on Thursday, June 14. Both have the potential to move markets.

With markets riding a rollercoaster of risk and recovery the last week of May, it’s good to note many positive economic signals. Nevertheless, the dynamics of world growth have shifted.

The Federal Reserve (Fed) started formally targeting inflation at 2% relatively recently (2012). Several of the inflation indicators that the Fed watch are now at or above that level. Does that mean that the Fed can say mission accomplished?

According to the National Bureau of Economic Research, the last U.S. recession started in December 2007 and ended in March 2009. Which means this expansion has lasted 106 months, making it one of the longest on record. But what if I told you that the United States was nearly in recession two years ago.

Friday’s payroll report from the Bureau of Labor Statistics was disappointing. Headline job gains were a measly 103,000; revisions to January and February payrolls lopped off another 50,000 jobs. For several reasons, we’re not worried.

The world economic expansion that began in early 2016 marched onward in the first quarter, but growth momentum came off the boil. Outside the United States, the energy that kept pushing signs of business activity and consumer confidence to new cycle highs for over a year has faded.