NGDP Outlook

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Yellen Preserves the Sanctity of the Punch Bowl

The market reaction following Chairwomen Yellen’s announcement of Fed policy on March 15th was clear, it wasn’t as bad as feared. Our NGDP forecast engine (which is based on daily average data, not closing prices) ticked up from 4.06% to 4.11%. The two decimal points of precision should not be read as an overestimation of

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All quiet on the nominal front

Little has happened to the NGDP outlook in the past week. It still looks like we’re set for about 4% nominal growth from the current quarter through to 2018Q1. This is probably about as good as we can expect in the current environment, so let’s be grateful for it. 4% nominal growth isn’t ideal, it

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A Modest upturn in the outlook

The outlook has improved since February 2016. According to our NGDP forecasting system, which is statistically driven, so immune to partisan bias or wishful thinking, a full percentage point of nominal GDP has been added to the outlook.  We have gone from the low 3%s to the low 4%s in terms of expected year-ahead growth.

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Moving on up in Q1

We’ve updated our market-driven nominal GDP forecast through January 25th, which is about as far in time as we can do it without violating anyone’s intellectual property rights. Can you believe Bloomberg want’s $3k a month for a data feed? This post is being written on January 28th, a day after the first estimate of

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With the end of the fourth quarter, we have abandoned the old year-ahead forecast and now focus on updating the new forecast, for one year ahead of the current quarter. As always when transitioning to a new quarter, we remind readers that the jump or drop in the transition, in this case moving from 3.7%

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Merry NGDP Revisions

GDP revisions came out last week and the last 4 forecast points reflect the new figures. However, in this case, the revision has essentially zero effect on the forecast. This is because GDI,  an alternative, but equally valid measure of GDP, was revised in the opposite direction, leading to negligible change in the series we use

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The FOMC’s latest policy announcement had undone much of post-Trump bounce in NGDP expectations. The quarter-point rise in the Fed Funds target window was all but fully priced in to markets, so the sour tone of markets following the announcement must be due to other hints in Yellen’s statement. Presumably markets were less than enthusiastic

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Markets seem to be forecasting the best NGDP outlook since the fourth quarter of 2015. This is however not saying much, as the outlook has been downbeat for all of 2016, and our market-driven forecast is still only at 3.8%.  What does this 3.8% mean? It means the market is expecting 2017 to look a little better

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The latest update to our NGDP forecast, for the trading days of Nov. 29 though Dec 1, was run using the BEA’s second estimate of nominal GDP (revised up) as well as the first estimate of GDI (Gross Domestic Income). GDI is an alternative, but equally (possibly more) valid measure of GDP, using the income-side

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The basket of U.S. financial market prices that NGDP Advisers uses to update the NGDP forecast ended Nov. 9th in a slightly more bullish direction than they had ended Nov. 8. Overall the forecast rose to 3.72% from 3.68%.  Although the U.S. dollar strengthened (by itself a ‘bearish’ input into the model) stocks, copper, oil,

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