NY Fed survey doesn’t [corrected per Gorodnichenko- median NY Fed does not, but mean would]
Figure 1: Bordo-Siklos measure of central bank credibility, using 5 year Michigan expectations (blue). Assumes 2.45% CPI inflation is consistent with 2% PCE deflator inflation. NBER defined peak-to-trough recession dates shaded gray. Light orange denotes Trump administration. Source: BLS, NBER, and author’s calculations.
Addendum 5/17/2025: From Gorodnichenko-Coibion,
” LR expectations: you should rely on mean 5-year ahead expectations of the Michigan survey, and these are currently very high and unambiguously unanchored.”
For one year:
Source: Gorodnichenko-Coibion (2025).
Speaking of credibility:
https://www.ft.com/content/90196d6d-b147-4943-9b26-888c171d6a5a
The FT (paywalled) says U.S. financial regulators are preparing to reduce the supplementary leverage ratio for large banks. Here’s The Guardian on the same story (free):
https://www.theguardian.com/business/2025/may/15/us-reportedly-plans-slash-bank-rules-imposed-prevent-2008-style-crash
So, more risk of contagious financial shock – and of more bailouts – so that big banks can become bigger.
My computer shows essentially all of 2017-2021 inclusive as shaded, as well as all of 2025. Has the NBER changed its dating methodology?
H Brown: Per notes to the figure, light orange shading denotes Trump administrations. I omitted NBER dates, will add.
Since the U.S. right-wing/GOP/MAGA loves to promote Putin’s Russia, I like to occasionally check in on how Russia is doing. In April 2025, Russia experienced a sharp rise in mortality rates, with regional increases ranging from 15% to 40% compared to the same period last year. This resulted in a record number of deaths in the country, reaching 168,000, and exceeding even the peak during the COVID-19 pandemic. For example, in the Arkhangelsk region, the number of deaths increased by 39%, in Tula region by 20%, and in the Novosibirsk region by nearly 15% (This is reporting on official regional offices of the Civil Status Registration). Since the beginning of 2022, it’s estimated that almost a million Russian citizens have emigrated to other countries. In addition – Ukrainian sources indicate that Russia has suffered almost 1 million causalities during the Russian invasion. Rosstat’s latest worst-case scenario anticipates a deep population decline of 15.4 million over the next 22 years to a projected population drop to 130 million by 2046 from current 146 million, Given the current population pyramid in Russia of mostly older age cohorts and most of the causalities are young men – this doesn’t bode well for Russia in the future.
Economy-wise – Russia is not doing well – In 2024, approximately 7.1% of Russia’s GDP was allocated to military spending, according to the Stockholm International Peace Research Institute (SIPRI). The latest EU sanctions will also target Chinese and Turkish entities that the EU says are helping Russia to evade embargoes. New restrictions will be imposed on 30 companies involved in the trade of dual-use goods – products with potential military applications.
The big question is whether the drastic reduction of young men will further decrease the birth rate in Russia. The choice of a woman to not have children is likely influenced by the availability of suitable mates.
“Michigan Survey Implies a Catastrophic Collapse of Fed Inflation Credibility”
Perhaps that should be clarified to say that it’s not the Fed or Powell per se that is losing credibility. It’s the risk of the Fed being unable to maintain its independence from Trump illegally meddling with the Fed. Ultimately, it is the Supreme Court that is losing its credibility as it fails to uphold the separation of powers.
Dont forget congress own failure in enforcing separation of powers.