Second quarter U.S. economic growth was revised higher to 1.4%, according to the third and final estimate, leaving first half growth just north of 1.0%.
The markets will be anxiously awaiting the U.S. presidential election, as this election cycle has proven to be unlike any other.
Business investment will suffer from increased uncertainty surrounding the election and potential policy implications.
We remain encouraged by the resiliency of the U.S. labor market and elevated measures of consumer sentiment, both positives for consumption going forward.
The U.K. economy remains mired in post-Brexit uncertainty; in contrast the economic data has held up relatively well.
Thus far, U.K. consumers appear somewhat unfazed by the increased political uncertainty while the same is not true for businesses.
Meanwhile, the U.K. unemployment rate has held at cycle lows and inflation measures are running below long-run targets.
After strong Eurozone economic growth in the first quarter, second quarter growth slowed and risks remain tilted toward the downside as we await third quarter estimates.
Monetary policy has tried to support a struggling Eurozone economy, but help is needed on the fiscal side.
China remains the source of considerable uncertainty as their currency continued to weaken versus the dollar throughout September.
Global Monetary Policy
All four major developed market Central Banks held meetings in September to set, evaluate, adjust, and or tweak monetary policy. Monetary policy remains exceedingly accommodative by any historical measure.
The Bank of England (BOE) and European Central Bank (ECB) both resisted the urge to ease policy further taking a wait and see approach while flashing their dovish feathers.
The Fed voted to leave policy unchanged, but the number of descents grew from one to three, suggesting a growing divide within the committee.
Interestingly, the BOJ shifted policy and will now target specific yield levels while signaling to markets that they intend to let inflation run hot.