The ruble has stabilized at near pre-invasion levels, and the Central Bank of Russia drops the policy rate to 17%. What’s going on?
“High-frequency macroeconomic risk measures in the wake of the war in Ukraine”
In a VoxEU post by Laurent Ferrara, Matteo Mogliani, and Jean-Guillaume Sahuc today, applying a growth-at-risk (GaR) approach (Ferrara et al. 2022, ungated 2020 WP version) they estimate they downside risk to Euro area vs. US GDP q/q growth.
What to Make of the 10yr-2yr and 10yr-3mo Spreads
As is well known, the recession talk has surged in the wake of the (short-lived) inversion in the 10yr-2yr spread.
Recession in 2023?
From Folkerts-Landau and Hooper at Deutsche Bank, yesterday:
…inflation in the US and Europe has now reached levels that have forced the Fed and
the ECB to pivot their monetary policy stances dramatically. As a result, we now
expect the US economy to be in outright recession by late next year, and the EA
in a growth recession in 2024…
Ten year-two year Spreads around the World
There’s been a lot of commentary regarding the inversion of the US yield curve, specifically a negative 10yr-2yr spread. Here’s a graph depicting 10yr-2yr spreads (aka “2s10s”) for several economies.
Inflation Expectations and Forecasts
Market expectations for inflation over next five years as of today:
The Employment Release and Business Cycle Indicators as of April 1
Here’s a picture of several key macro indicators followed by the NBER BCDC, including today’s employment release and monthly GDP, and yesterday’s consumption and mfg/trade industry sales numbers. The recovery continues.
Inflation since 1960
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”.