An extensive Board article released on Friday:
Eric Hovde Predicts
recession, stock market decline, and housing market decline. From December 19th (Newport Beach Independent):
- Economic Slowdown: The U.S. is likely to enter a recession, with consumers expected to deplete their savings, leading to only one potentially positive GDP quarter in 2024.
One Year Ahead Inflation Expectations
April and May inflation was overpredicted by year-ahead consumer-based surveys.
CNY Overtakes CAD in FX Trading, CB Reserve Holdings in 2022
Talking about the dollar as an reserve currency next week [2], and noticed these interesting trends.
Private Nonfinancial Corporate Debt-Service-Ratio
In yesterday’s post, I noted a recession forecast based on a probit specification incorporating a debt-service-ratio yielded a substantially lower probability for 2024M05 than a plain vanilla specification. Part of why this is true is that the debt-service ratio is fairly low, despite high Treasury yields.
Expect More Houstons
From Bloomberg:
Recession Probabilities in Light of the Ever-Receding Recession
If no recession is forthcoming, what can we conclude, given most term spread models were signaling a “sure bet”? Unlikely outcome (it’s a probabilistic world!), breakdown in historical correlations, omitted variable problem? In order to shed some light on this question, I examine probability estimates from (i) plain vanilla spread, (ii) debt-service-ratio and foreign term spread augmented, and (iii) term-premium adjusted spread specifications.
May SPF GDP Forecast (updated w/17 May Nowcasts)
Continued growth (report):
Wisconsin Employment Trends Sideways
DWD reports on April figures. This allows for the following picture of Wisconsin macro aggregates.
Import Prices Surprise
The index came in at +0.9% vs. +0.2% m/m.