The Macro Minute: The ISM Services Report Challenges the Consensus Outlook
The host argues that September's ISM services report and August factory orders do not support consensus expectations for faster growth or slowing inflation, while the services data reinforce his views that the U.S. economy remains resilient and inflation is sticky. He also sees France's strained public finances as adding to pressure on European bond markets and, in his view, deepening the supply-demand imbalance in U.S. Treasuries; he concludes that private-credit concerns appear more related to asset-class flows than to a broad credit-cycle downturn.
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Read the Full SummaryKey Points
The host says the September ISM services report and August factory orders did not support consensus forecasts of accelerating growth or slowing inflation, and that the services report reinforced his resilient-economy and sticky-inflation themes.
The host says France's deficit is widening instead of shrinking toward its 5%-of-GDP target, and that French debt is near 120% of GDP, roughly twice Germany's.
The host argues that European rate-market issues support his view that geopolitical forces are worsening the supply-demand imbalance in the U.S. Treasury market.
ISM Services Outlook
The September services PMI and August factory orders do not support consensus forecasts for accelerating growth or slowing inflation, while the services data reinforce the host’s resilient-economy and sticky-inflation themes.
French Debt And Treasury Demand
The host describes France’s worsening fiscal position and rising market pressure, arguing that European bond-market strains deepen the supply-demand imbalance facing U.S. Treasuries.
Private Credit And Recession Risk
In response to a question about private-equity weakness, the host attributes private-credit concerns mainly to asset-class flows and says credit and economic indicators do not signal a broad downturn.
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