NGDP Update, July 3 2017

The forecast has rebounded. Immediately following the Fed’s June 13 meeting, markets moved (overall) in a direction that indicated less NGDP growth. A few indicators have however turned up at the end of June, resulting in a rebound in the outlook to the high-point of the quarter. Indicators that have rebounded include 5-year TIPS breakeven, the copper price, the Dollar index and the 5-year yield, which rose from 1.59 to 1.62. The 5-year yield increase suggests the market thinks the Fed will be able to keep rates up. What is notable is what hasn’t fall far from pre-rate-hike levels such as…

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