Phillips/Krupa at GS note exhaustion of emergency measures to avoid the debt ceiling could arrive earlier than expected. Insurance costs have risen to above 2011 levels.
Did the Expanded Russian Invasion of Ukraine Constitute “News”
Reader JohnH is unconvinced that the Russian invasion was at all important to the US economy, according to his comments to this post. Here is the revision in GDP expectations going from pre-invasion to post-invasion.
“Funny that these graphs consistently show the start of the Russian invasion, apparently a propos of nothing.”
That’s reader JohnH wondering why I put indications of the expanded Russian invasion of Ukraine (recalling the original invasion is in 2014), along with the recession. Well, it seemed like the beginning of the largest land war in Europe since World War II (with major battles not far from Kursk) had an impact on sentiment, etc., to wit:
Weekly Macro Indicators through April 8
Here’re some macro indices at the weekly frequency for the real economy.
Credit Easing/Tightening/Easing/? 2007-2023
Prepping for monetary policy lecture in Monday’s lecture, here’s the Cleveland Fed’s picture of Fed assets over time.
Inflation and Costs, One Year Ahead: What Do Businesses Think?
Paul Krugman reminds me why “expected” inflation doesn’t necessarily translate into one-for-one actual inflation, because of nominal rigidities like staggered contracts. He also brings my attention to costs that firms expect (as opposed to prices they expect), as measured by the Atlanta Fed’s “Business Inflation Expectations”. Here’s how those expectations stack up against others, and actual evolution of costs.
One-Year CPI Inflation Expectations
Slight bump up in March/April expectations, but still down relative to mid-2022.
Foreign Term Spread Augmented Recession Model Prediction
About 83% probabiity within a year: Here’s the edited version of Table 3 of Ahmed-Chinn (2022), plugging in March 31, 2023 values (in red), which I prsented in a UW Milwaukee Department of Economics seminar today (thanks to my gracious hosts, who provided tons of great comments/criticisms).
CPI, PPI, and PCE Instantaneous Inflation
Based on Eeckhout, using a=4, T=12: