NGDP Outlook

August 22 NGDP Update: Forecast lifts higher

August 22 NGDP Update: Forecast lifts higher The NGDP forecast has hiked from under 3.8%, up to 3.9% in dramatic fashion through late July. Well maybe not so dramatic, and the change is not so big, it is at least a consistent movement. What’s more, the forecast has mostly held at this level for the

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NGDP Update: 2018Q3 Forecast begins

It is the start of a new quarter, this means we move our focus from the tired old 2018Q2 forecast (shown in the plot below as the orange line) and move on to the exciting and fresh 2018Q3 forecast (the blue/purple line). As always, the discontinuity between the two forecast lines is a feature, not

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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,

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NGDP Outlook June 15th 2017

Market-implied NGDP expectations fell from 3.9% year-ahead before the recent Federal Reserve policy statement, to just above 3.8% after. A disappointing result and a stark way of quantifying the restrictiveness of current Fed policy. The Fed had announced months ago that four rate hikes would be done in 2017, and yes, they really mean it.

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NGDP Outlook-May 21, 2017

The NGDP outlook has rebounded a bit from a low point for the current Quarter-2 of 2018 forecast that was seen in early May. Notably, the rebound preceded the recent volatility in US Equities. Recapping the recent moves in US equities: the S&P 500 tanked on May 17, falling about 1.7 percentage points. The drop

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NGDP Update May 2017

The NGDP outlook has held mostly steady over the past month, with the year-over-year figure for Q2 of 2018 fluctuation from a maximum of 3.9% to a minimum of 3.75%. This narrow range of variation came despite the introduction of the first estimate of NGDP for Q1 of 2017 on April 28th , which lowered

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A new quarter, a new forecast

We’re now in the second quarter of 2017, so, in keeping with our convention to focus on the year-ahead part of the NGDP outlook, we are switching from the 2018Q1 forecast to the 2018Q2 forecast. The forecast for 2018Q2 is notably lower than that for 2018Q1, falling from nearly 4.1% year-over-year to just over 3.8%

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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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