It might be misleading to rely to heavily on simple inflation break even calculations, which show inflation over the next five years lower today than they were on the even of the expanded Russian invasion of Ukraine.
Category Archives: financial markets
Guest Contribution: “Forecasting Real Activity using Cross-Sectoral Stock Market Information”
Today, we are fortunate to present a guest contribution written by Arthur Stalla Bourdillon, economist at the Banque de France. The views expressed herein are those of the author and should not be attributed to the Banque de France, Eurosystem or NBER.
Bank Lending, thru Aug. 17
Or, a post for Steven Kopits.
GDP and Ten Year Yield Forecasts: Messages from the Survey of Professional Forecasters
A remarkable downgrade in expected growth shows up in a large implied negative — and widening — output gap, even as forecasted long yields rise, according to the Survey of Professional Forecasters (released 8/12).
“The Impacts of Crises on the Trilemma Configurations”
Excepting international reserves, trilemma configurations were durable through the global financial crisis. From Aizenman, Chinn and Ito (forthcoming Open Economies Review, 2022) (also NBER WP No. 30406).
Inflation Breakeven and Term Spreads Adjusted for Premia
Expected inflation inferred from the Treasury-TIPS spread is tainted by risk and liquidity premia. The difference between expected future short rates and current short rates is also obscured by risk premia. Here are adjusted spreads:
Spreads Diverge as Inflation Breakeven Drops
Big daily movement in 10yr, 5yr yields:
Term Spreads Falling
And negative at the 2s10s:
Nonresidential Fixed Investment and Prospects for GDP Outlook and Revisions
One of the interesting aspects of the current recovery is the relative small rebound in nonresidential fixed investment.
One Year Treasurys and One Year Forwards
Interest rates still expected to rise, but at slower pace: