Figure 1: Headline CPI inflation, year-on-year (blue), and Core (brown), both in %. NBER defined recession dates peak-to-trough shaded gray. Source: BLS, NBER.
The Ruble vs. Exchange Market Pressure in Russia
The value of the ruble has returned to pre-invasion levels [1]. But what I am more concerned about is exchange market pressure. And there, we are at sea.
Average Hourly Earnings, 2000-2022M02
Were wages flat during the Obama administration? Did they rise appreciably faster in the first three years of Trump (as asserted by this commentator)? 30 seconds of data retrieval reveals the answer is “no”.
Empirical Estimates of Steel Tariff Pass Through
What is the proportion of tariff increases passed through into domestic price increases for steel, in the wake of the Section 232 actions. Some of the oft cited estimates pertain to early on in the trade war. With the benefit of additional data, we have more evidence confirming that — unlike the tariffs imposed on most other goods — pass through is less for steel.
Guest Contribution: “Rising Inflation, Narrowing Policy Space”
Today we are pleased to present a guest contribution written by Justin-Damien Guénette (Senior Economist), Jongrim Ha (Senior Economist), M. Ayhan Kose (Chief Economist and Director) and Franziska Ohnsorge (Manager) from the World Bank’s Prospects Group. The findings, interpretations, and conclusions expressed in this blog are entirely those of the authors. They do not necessarily represent the views of the World Bank, its Executive Directors, or the countries they represent.
Plain Vanilla Term Spread Forecasts of Recession
What do simple 10yr-3mo and 10yr-2yr Treasury spreads imply about recession probabilities?
On Tariffs, and Large Country Assumptions
Suppose the US puts a 10% tariff on imports from a foreign country. Will import prices (inclusive of tariffs) rise 10%? It depends on the elasticity of supply of said imports. If the elasticity of supply is less than perfect, then import prices will rise less than 10%. To see this, consider the most basic tariff graph in the known universe (from Feenstra-Taylor) – if you can’t understand it, abandon all hope for comprehension of tariff policy.
More Recession Talk
Articles regarding the signals emanating yield curve appear in Reuters, CNBC, FoxBusiness, Bloomberg, CNN . Here’s a relevant picture:
Prices of Iron and Steel, and Trade Policy
I’m covering the impact of tariffs and quotas (general, antidumping, countervailing subsidy, section 232) and updated some graphs on steel employment, production, and prices. Here’s one particularly interesting one:
Russian GDP Prospects Visualized (again)
Recent forecasts indicate 9.6% GDP y/y decline in 2022 (Bloomberg consensus, 3/25), or 15% (IIF, 3/10, via Reuters). S&P Global (3/22) forecasts 22% decline (q4/q4).