Treasury Ten Year Yield Forecasts

Little changed from July, at least from the Wall Street Journal’s survey of economists: Figure 1: Interest rate on 10 year Treasury bond actual (black), mean forecast from November 2020 WSJ survey (salmon inverted triangle), from July 2021 (green triangle), from October 2021 (pink square), […]

Recession before the Leaves Fall?

From Blanchflower and Bryson: It seems to us that there is every likelihood that the US is entered recession at the end of 2021. The most compelling evidence is from the Conference Board expectations data for the eight biggest states. Well, that’s certainly provocative. Here’s […]

GDP Forecasts

The October Wall Street Journal survey of economists, now quarterly, is out. A substantial downshift in the forecasted level of GDP is apparent. Figure 1: GDP (bold black), November 2020 WSJ survey mean (red), July 2021 survey mean (blue), and October 2021 survey mean (green). […]

Business Cycle Indicators, Mid-October

Here is a graph of some key indicators followed by the NBER Business Cycle Dating Committee, including industrial production, which missed expectations (actual -1.3% vs. +0.2% Bloomberg consensus, m/m not annualized): Figure 1: Nonfarm payroll employment from August release (dark blue), industrial production (red), personal […]

A Graphical Primer to Interpreting the Sources of Inflation in the Covid Era

For students in Econ 435, using model originally in Robert Hall and John Taylor, “Macroeconomics”, and shown in the ADAS handout. We hear about lots of factors affecting both output and inflation in this Covid impacted period: demand induced overheating, supply shocks, supply chain disruptions, […]

Lumber Futures As Predictors

In assessing market views on future lumber prices, reader JohnH writes: Futures markets aren’t foreseeing a decline in lumber prices any time soon.https://www.barchart.com/futures/quotes/LS*0/futures-prices Here’s a graph of lumber prices over time, and futures as of 10/15: Figure 1: Front month lumber futures, monthly average of […]

Velocity Is Not Stable

I thought this had been determined half a century ago, but just to remind people in case they’d forgotten. Figure 1: M1 velocity (nominal GDP divided by M1, end-of-quarter) (blue, left scale), and M2 velocity (brown, right scale). Source: BEA, Federal Reserve data via FRED, […]

Real Lumber Prices

PPI indicates they are down: Figure 1: PPI for lumber, softwood (blue), and for lumber (brown), both 1982=100, deflated by CPI to 2020$, both on log scales. NBER defined recession dates shaded gray. The lumber real PPI is essentially back at the levels at the […]

Guest Contribution: “Foreign official demand for US debt and US interest rates: Accounting for global common factors”

Today we are fortunate to be able to present a guest contribution written by Rashad Ahmed (Office of the Comptroller of the Currency, US Treasury). The views presented are solely those of the author, and do not necessarily represent the views of the US Treasury, […]

If You Are Worrying About Inflation Eroding Wages…

So far, the lower paid are seeing the biggest gains… Figure 1: Real average hourly earnings in private nonfarm payroll employment (black), in manufacturing (red), and in leisure and hospitality (teal), CPI deflated, in logs 2020M02=0.All series pertain to production/non-supervisory workers. NBER defined recession dates […]