UBS US Economic Weekly: A New FOMC Regime
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UBS's US economic weekly assesses the start of a new FOMC regime. One exhibit puts the inflation backdrop in context: PCE inflation averaged 1.7% between 2005 and 2019, a benchmark against which current price pressures sit uncomfortably high. Another tracks spending in a high-interest-rate environment, testing how households and firms are coping with restrictive policy. The policy path is the crux: the September Summary of Economic Projections (medians) shows the dot plot remaining restrictive even after inflation returns to 2.0%. On the data side, the New York and Philadelphia Fed manufacturing surveys were strong in September on an ISM-adjusted basis (above 50 signals expansion), while exports and production showed little change. Housing remains a soft spot, with existing-home and pending sales subdued, and services surveys offer a further reading on the largest part of the economy. Finally, the broadening of tech-led gains in core orders highlights how capital spending continues to concentrate in technology.
Key exhibits
Exhibit 1
Exhibit 2
Exhibit 3
Exhibit 4
Exhibit 5
Exhibit 6
Exhibit 7
Exhibit 8
