Independent Economist, Forecaster and Strategist

Thomas Lam

Macroeconomics

<ul>
<li>Central banks in Developed Markets and Emerging Markets are either cutting, maintaining or hiking their respective policy rates</li>
<li>I introduce an improved Monetary Diffusion Indicator of Normal policy (MDIN) to encapsulate the dispersion of central bank policy globally</li>
<li>The MDIN, which goes back more than five decades and captures roughly 90% of central banks globally in GDP-terms, slipped to 21 in October</li>
</ul>


Central banks in Developed Markets and Emerging Markets are either cutting, maintaining or hiking their respective policy rates
I introduce an improved Monetary Diffusion Indicator of Normal policy (MDIN) to encapsulate the dispersion of central bank policy globally
The MDIN, which goes back more than five decades and captures roughly 90% of central banks globally in GDP-terms, slipped to 21 in October


Macklem, Orr, Gongsheng, Ueda, Bailey, Powell, Lagarde, Nabiullina and MDIN

<ul>
<li>The FOMC announced a 50bps cut at the September meeting, but Chair Powell hemmed and hawed on future rate cuts</li>
<li>The eye catching market volatility before and after Powell's presser elevates the importance of effective Fed communication</li>
<li>The latest market-pricing for the funds rate, though far from settled, is roughly in-line with a no-recession scenario currently</li>
</ul>


The FOMC announced a 50bps cut at the September meeting, but Chair Powell hemmed and hawed on future rate cuts
The eye catching market volatility before and after Powell's presser elevates the importance of effective Fed communication
The latest market-pricing for the funds rate, though far from settled, is roughly in-line with a no-recession scenario currently


<ul>
<li>The undulating prospect of a 25bps or 50bps cut at the September Fed meeting coupled with a foggy future rate path is weighing on market sentiment</li>
<li>The state of financial market conditions--broadly and narrowly defined--may abruptly influence the outcome of upcoming Fed meeting/s, or vice versa</li>
<li>My weekly estimate of market leverage in the US hedge fund sector in total, which remains elevated at this time, warrants more attention</li>
</ul>


The undulating prospect of a 25bps or 50bps cut at the September Fed meeting coupled with a foggy future rate path is weighing on market sentiment
The state of financial market conditions--broadly and narrowly defined--may abruptly influence the outcome of upcoming Fed meeting/s, or vice versa
My weekly estimate of market leverage in the US hedge fund sector in total, which remains elevated at this time, warrants more attention


<ul>
<li>A climb in the unemployment rate can be associated with recessions, especially when dominated by a negative change in employment</li>
<li>But the recent rise in the unemployment rate through July does not seem to be consistent with the characteristics of prior recessions on balance</li>
<li>Nevertheless, further increases in the unemployment rate need not be of the same breed   </li>
</ul>


A climb in the unemployment rate can be associated with recessions, especially when dominated by a negative change in employment
But the recent rise in the unemployment rate through July does not seem to be consistent with the characteristics of prior recessions on balance
Nevertheless, further increases in the unemployment rate need not be of the same breed   


How Different Is the Current Unemployment Behavior?

<ul>
<li>Arguably, the state of the US labor market is key to any recession call</li>
<li>Despite the ongoing rise in the unemployment rate, other labor market dynamics might be at play</li>
<li>One simple approach is to use the claims gap along with the unemployment rate to assess whether labor market conditions are deteriorating </li>
</ul>


Arguably, the state of the US labor market is key to any recession call
Despite the ongoing rise in the unemployment rate, other labor market dynamics might be at play
One simple approach is to use the claims gap along with the unemployment rate to assess whether labor market conditions are deteriorating 


Is the US Labor Market Signaling a Recession?

Tom has over two decades of experience in the realm of economics and finance, with expertise ranging from covering the global economy, deciphering financial markets, including macro forecasting, to advising on investment strategy.

He commenced his career in New York, initially at a large money-center bank and then at a hedge fund.  Thereafter, while in Singapore, he worked at two financial institutions and later joined academia.  

Tom has been consistently ranked among the top five most accurate economists in the world on forecasting the US economy overall (placed third, last published by the “Bloomberg Rankings of Top Forecasters”).  During the Global Financial Crisis, he was also acknowledged as the second-best US forecaster worldwide.  

Moreover, he was exclusively identified by Bloomberg to have accurately predicted the onset of the 2009 US recovery 16 months ahead of the official announcement.  Consequently, he has been widely publicized as one of “Wall Street’s Most Prophetic Economists”.