Today, we are pleased to present a guest contribution written by Kevin Pallara, Luca Rossi, and Fabrizio Venditti of the Bank of Italy. The views presented in this note represent those of the authors and do not necessarily reflect those of the Bank of Italy or the ESCB.
Category Archives: financial markets
News
Interest rates down:
Inversions, Bear Steepening Dis-Inversions, and Recessions
Does it matter if spreads are dis-inverting because short yields are falling, or long yields are rising? MacKenzie and McCormick (Bloomberg) say yes. With long yields rising…
Real Ten Year Treasury Yields: Back to the ‘Aughts?
In a way, yes — that is in terms of levels. In terms of pace of change, no.
Scavino (or Kudlow) Strike Again: Disinformation Edition
I saw this screenshot of a post from Dan Scavino, former Deputy Chief of Staff for Communications in the Trump White House, and former caddie for a party at the Trump National Golf Club Westchester (at that time, Briar Hall Country Club), and thought “those numbers don’t look right”.
How Much Have (Ex Ante) Real Rates Risen?
Ten year Treasurys and Fed funds:
Recession Probabilities (using data through end-2022)
In a project with Laurent Ferrara, we have been examining the properties of financial indicators as predictors of (NBER defined) recessions. In addition to the term spread, we have considered Financial Conditions Indices (Arrigoni-Bobasu-Venditti, Goldman Sachs), the foreign term spread (a la Ahmed-Chinn) and the BIS debt service ratio (suggested by Borio-Drehmann-Xia). Slides from presentation in June here.
Term Spread Watch – Is This Time Different?
A reporter for Marketplace (hear piece at 10 minutes in) asked me today whether this time was different, especially in light of all the positive coincident indicators (Q3 GDPNow has been at 5.6% for a couple weeks; Fed staff has upgraded q4/q4 growth, Goldman Sachs pegs recession probability at 15%). I was (I hope properly) circumspect.
Velocity, 1967-2023Q2
The variability of velocity calculated using divisia money indices is not necessarily lower than that using a conventional monetary aggregate, i.e., M2.
Guest Contribution: “The crypto cycle and US monetary policy”
Today we are fortunate to present a guest post written by Natasha Che, Alexander Copestake and Davide Furceri (all at the International Monetary Fund) and Tammaro Terracciano (IESE Business School, Barcelona). The views expressed in this paper are those of the authors and not necessarily those of the institutions with which they are affiliated.