Economist (US Macro), RDQ Economics

Conrad DeQuadros

Economist (US Macro)

RDQ Economics

RDQ Economics provides global macroeconomic consulting services with an emphasis on U.S. economic fundamentals and monetary policy.  
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Our views are driven by consistent application of classical economic and monetary principles and has generated superior anticipation of changes in the stance of monetary policy and of movements in economic growth and inflation.
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The founders of RDQ Economics—John Ryding and Conrad DeQuadros—worked together on Wall Street for a decade, in the independent research space for nine years, and have experience in central banking at the Federal Reserve and the Bank of England.  John and Conrad have worked closely with fixed income, foreign exchange, and equity traders and portfolio managers, which has enabled their analysis and advice to be tailored to a clientele that is focused on trading and investment decisions.

Credit

The October inflation report was pretty much as expected and contained no change in underlying inflation trends.  The report showed core inflation remaining near 2% and points to continued gradual Fed interest rate hikes.  Overall CPI inflation picked up to 2.5% in October on energy prices; however, the recent sharp decline in crude oil prices suggests that overall CPI inflation will moderate in the months ahead and this may lead to lower TIPS inflation breakevens.

The October inflation report was pretty much as expected and contained no change in underlying inflation trends.  The report showed core inflation remaining near 2% and points to continued gradual Fed interest rate hikes.  Overall CPI inflation picked up to 2.5% in October on energy prices; however, the recent sharp decline in crude oil prices suggests that overall CPI inflation will moderate in the months ahead and this may lead to lower TIPS inflation breakevens.

October CPI Review: Core Inflation Held Near 2%, Overall Inflation Picked Up But Is Headed Lower

The August inflation reports have thus far been surprisingly benign with, for example, a modest monthly core CPI gain slowing the year-over-year core inflation rate to 2.2% in August from 2.4% in July.  Nonetheless, we do not view this as evidence that price pressures have eased and these August reports should not shake the Fed’s confidence that their inflation objective has effectively been achieved.

The August inflation reports have thus far been surprisingly benign with, for example, a modest monthly core CPI gain slowing the year-over-year core inflation rate to 2.2% in August from 2.4% in July.  Nonetheless, we do not view this as evidence that price pressures have eased and these August reports should not shake the Fed’s confidence that their inflation objective has effectively been achieved.

August CPI Review: Are U.S. Inflation Pressures Easing?

Though there were no dramatic surprises in last week’s U.S. CPI data, the upward creep in underlying inflation—though gradual—is unmistakable.  In recent testimony to Congress, Fed Chairman Powell downplayed the progress toward the inflation goal and also suggested that the risks to inflation remain tilted toward the downside.  In this insight we argue that Powell is misjudging the inflation risks and the data suggest the Fed should declare victory on its price stability objective.

Though there were no dramatic surprises in last week’s U.S. CPI data, the upward creep in underlying inflation—though gradual—is unmistakable.  In recent testimony to Congress, Fed Chairman Powell downplayed the progress toward the inflation goal and also suggested that the risks to inflation remain tilted toward the downside.  In this insight we argue that Powell is misjudging the inflation risks and the data suggest the Fed should declare victory on its price stability objective.

The Fed's Downplaying Of Inflation Target Progress Is Unwarranted

Assessments of macroeconomic effects of trade wars appear to be primarily viewed through the lens of a growth headwind rather than an inflation tailwind.  We think protectionist trade policies might represent a persistent upward influence on inflation rather than just a one-off step-up in the price level.  We would argue that with growth running ahead of the Fed’s assessment of its sustainable longer-run trend, the unemployment rate already below the rate the Fed judges as being consistent with full employment, and with inflation on target, policymakers should be more concerned about the inflationary consequences of tariffs rather than the growth effects.

Assessments of macroeconomic effects of trade wars appear to be primarily viewed through the lens of a growth headwind rather than an inflation tailwind.  We think protectionist trade policies might represent a persistent upward influence on inflation rather than just a one-off step-up in the price level.  We would argue that with growth running ahead of the Fed’s assessment of its sustainable longer-run trend, the unemployment rate already below the rate the Fed judges as being consistent with full employment, and with inflation on target, policymakers should be more concerned about the inflationary consequences of tariffs rather than the growth effects.

The Risk of a Persistent Inflation Lift from Trade Protectionism

Given that the Federal Reserve’s 2% inflation target is a medium-term and symmetric objective, what matters to policymakers is the underlying trend in inflation.  With this insight we discuss so-called "core" inflation and other measures of underlying inflation.

Given that the Federal Reserve’s 2% inflation target is a medium-term and symmetric objective, what matters to policymakers is the underlying trend in inflation.  With this insight we discuss so-called "core" inflation and other measures of underlying inflation.

US Breakeven 10 Year (USGGBE10 INDEX)

October CPI Review: Core Inflation Held Near 2%, Overall Inflation Picked Up But Is Headed Lower

The October inflation report was pretty much as expected and contained no change in underlying inflation trends. The report showed core inflation...

RDQ Economics

August CPI Review: Are U.S. Inflation Pressures Easing?

The August inflation reports have thus far been surprisingly benign with, for example, a modest monthly core CPI gain slowing the year-over-year...

RDQ Economics

The Fed's Downplaying Of Inflation Target Progress Is Unwarranted

Though there were no dramatic surprises in last week’s U.S. CPI data, the upward creep in underlying inflation—though gradual—is unmistakable. In...

RDQ Economics

The Risk of a Persistent Inflation Lift from Trade Protectionism

Assessments of macroeconomic effects of trade wars appear to be primarily viewed through the lens of a growth headwind rather than an inflation...

RDQ Economics

Underlying Inflation Trends In The U.S.

Given that the Federal Reserve’s 2% inflation target is a medium-term and symmetric objective, what matters to policymakers is the underlying trend...

RDQ Economics