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Econbrowser

Analysis of current economic conditions and policy

Inflation Expectations, Post-Passage of the American Rescue Plan

At the end of the week, the five year constant maturity Treasury yield continued to rise along with the implied expected inflation rate; but after accounting for the estimated term premium and liquidity premium (h/t Bob), the increase in the latter since the Georgia elections is much more modest.

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This entry was posted on March 12, 2021 by Menzie Chinn.

Wisconsin Employment Trends with Benchmark Revisions

Wisconsin month on month employment (nonfarm payroll) grows at an annualized 4.8% in January, but remains 5.1% below January 2020 levels. NFP employment levels for December are benchmark-revised up by 51.7 thousand, or about 1.8%. Details from DWD.

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This entry was posted on March 11, 2021 by Menzie Chinn.

Recent Developments in Interest Rates and Spreads

The five year constant maturity Treasury yield has risen; but after accounting for the estimated term premium, the increase is much more modest, if not negative. Moreover, expected 5 year inflation has not on net moved much over 2021.

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This entry was posted on March 10, 2021 by Menzie Chinn.

Oil Prices: Futures, Survey Expectations

Despite the recent runup in oil prices, measures of expectations do not spike.

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This entry was posted on March 10, 2021 by Menzie Chinn.

The US Economic Outlook: March WSJ Survey

Forecasted GDP rises yet again, with considerable dispersion.

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This entry was posted on March 10, 2021 by Menzie Chinn.

The Price Level Shortfall

Had we run a 2% price level target since December 2007 (the beginning of the previous recession).

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This entry was posted on March 8, 2021 by Menzie Chinn.

Oil Prices and Oil Futures

As of March 7th:

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This entry was posted on March 7, 2021 by Menzie Chinn.

Are Market Expectations of Inflation Really Rising?

A typical market-based measure of expected inflation is the inflation breakeven calculated by subtracting the TIPS yield from Treasury yield at corresponding maturities. The breakeven spread is shown as the blue line in Figure 1.

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This entry was posted on March 6, 2021 by Menzie Chinn.

Interest Rate Projections

The CBO recently released long term projections for Federal budget variables, including debt. These projections rely upon the assumed path of interest rates. Here, there is considerable uncertainty. Figure 1 presents the 10 year Treasury yield, and CBO projections at various dates.

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This entry was posted on March 5, 2021 by Menzie Chinn.

The Employment Release and Business Cycle Indicators as of 5 March

The positive surprise in nonfarm payroll (NFP) employment — 379K vs Bloomberg consensus of 182K — was good news. However, it’s important to place this in context. NFP is 9.5 million lower (i.e., 6.2% lower) than the NBER peak in February 2020. In the context of key macro indicators followed by the  NBER Business Cycle Dating Committee:

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This entry was posted on March 5, 2021 by Menzie Chinn.

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Authors

James D. Hamilton is Professor of Economics at the University of California, San Diego

Menzie Chinn is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

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Recent Posts

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Econbrowser faces the data: (since Apr 30,2025)

Econbrowser recession indicator index: 11.7 (describes  2025:Q1)

The most recent U.S. recession began in 2020:Q1 and ended in 2020:Q2

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