We believe inflation is still, and always will be, a monetary phenomenon. It is defined as "too much money chasing too few goods and services" – but that doesn't mean every period of higher inflation is going to look exactly the same. Today's case for higher inflation is easy to understand. The M2 measure of [...]
A full recovery from the COVID-19/Shutdown Crisis is going to take a long time. We don't anticipate reaching a new peak for real GDP until the end of 2021; we don't anticipate a 4% unemployment rate until 2024. However, there is a growing amount of evidence that the economy may have hit bottom in May. [...]
Total deaths in the US from COVID19 look like they'll hit at least 3,000 by the end of March. A potentially brutal April lies ahead. In the meantime, the measures taken to limit deaths have temporarily tanked the US economy. Initial claims for jobless benefits soared to 3.283 million per week, easily the highest ever. [...]
Since the earliest days of the current economic expansion, there have been naysayers asserting the US was on the brink of another recession. Remember all the fear about another wave of home foreclosures, or a disaster in commercial real estate, or the Fiscal Cliff, or Greece potentially leaving the Eurozone, or German bank defaults, or [...]
This Friday, the government will release its initial estimate of real GDP growth in the second quarter, and the headline is likely to look soft. At present, we're projecting an initial report of growth at a 1.8% annual rate. If our projection holds true, we're sure pessimistic analysts and investors will latch onto the slowdown [...]
It wasn't that long ago that some economists and investors were seriously concerned about US growth going negative for the first quarter. Now, based on our calculations, which we discuss below, it looks like real GDP grew at a respectable 2.6% annual rate in Q1, meaning that US real output was 3.1% larger than Q1-2018. [...]
Real GDP grew at a 2.6% annual rate in the fourth quarter, and while some analysts are overly occupied with this "slowdown" from the second and third quarter, we think time will prove it statistical noise. Even at 2.6%, the pace is a step up from the Plow Horse 2.2% annual rate from mid-2009 (when [...]
Normally, the end of January sees the government's first estimate of real GDP growth for the fourth quarter. But with no end in sight for the shutdown, which has already seen numerous other data releases postponed – including figures on retail sales, international trade, inventories, construction, and durable goods - it's very unlikely the GDP [...]
Last Friday, the 10-year Treasury Note closed at a yield of 2.85%. That's up from 2.41% at the end of 2017, but down from the peak of 3.24% on November 8th, and well below where fundamentals suggest yields should be. In the last two years, nominal GDP growth – real GDP growth plus inflation – [...]