From NBC via Bloomberg:
Trump: “I couldn’t care less if [foreign automakers] raise prices because people are going to start buying American cars.”
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Author Archives: Menzie Chinn
Near Horizon Recession Probability
I run a probit regression of a NBER peak-to-trough recession dummy on contemporaneous Michigan sentiment (FRED variable UMCSENT, and final reading for March) and the 1yr-Fed funds spread (the last is per Miller (2019) who shows this spread has he highest AUROC of spreads at one month horizon).
Business Cycle Indicators for February: What Does It Mean When Consumption Falls while Income Rises?
Personal income growth at +0.8% m/m vs +0.4% Bloomberg consensus, while consumption growth is +0.4% m/m vs 0.5% consensus. GDPNow adjusted for gold imports now at -0.5% q/q annualized. Michigan final expectations for March down 52.6 vs 54.2 consensus.
More on the Mar-o-Lago Accord Malarky: “be afraid…be very afraid”
From Steve Kamin, two pieces: [1] [2]. A succinct summary:
So all told, Miran’s suggested options to lower the dollar while containing interest rates would be ineffectual, destabilizing, and ultimately for no good purpose. In his conclusion, he acknowledges some of these risks, but argues that because of Trump’s focus on financial markets, “I therefore expect that policy will proceed in a gradual way that attempts to minimize any unwanted market consequences…” Well, if the past few weeks of trade policy are any indication, be afraid . . . be very afraid!
2024Q4 GDP, GDO, GDP+, and Nowcasted Consumption Crash
Third release on GDP. We now have a reading on GDO, as well as an updated view on GDP+.
GDPNow Bouncing near Zero
From Atlanta Fed today:
Conference Board: “US Consumer Confidence tumbled again in March”
Conference Board confidence index at 92.9 vs. 94.2 consensus. Here’s confidence vs. U.Mich sentiment (all standardized).
“the stock market has predicted nine out of the last five recessions”
As attributed to Paul Samuelson. So, with trepidation, I show the SP500 and CAPE over the last half decade:
When Will EJ Antoni End His Recession Call?
EJ Antoni concludes we’re in a recession, and elsewhere, have been since 2022. On the other hand, he argues (rightly) that we shouldn’t take a face value GDPNow’s reading for Q1.
Guest Contribution: “No Mar-A-Lago Accord March 22, 2025”
Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version, was published by Project Syndicate.