9 votes

Yield Curve and Predicted GDP Growth

8 comments

  1. [8]
    envy
    Link
    Currently economists at the Cleveland Federal Reserve Bank are predicting a 44% chance of a recession in the next year in the US. It is a simple single variate prediction based on the yield spread...

    Currently economists at the Cleveland Federal Reserve Bank are predicting a 44% chance of a recession in the next year in the US.

    It is a simple single variate prediction based on the yield spread between the 3-month and 10-year US treasuries.

    The basis of the model is documented here:
    https://www.chicagofed.org/publications/chicago-fed-letter/2018/404

    2 votes
    1. [6]
      RapidEyeMovement
      Link Parent
      The Fed and this administration will not allow a recession before the next election. The market is already pricing in a 25 to 50 basis points cut in September. In Donald's mind he loses the...

      The Fed and this administration will not allow a recession before the next election. The market is already pricing in a 25 to 50 basis points cut in September.

      In Donald's mind he loses the election if we go into recession.

      1 vote
      1. [4]
        babypuncher
        Link Parent
        I think if POTUS and the fed actually had that power, the last one wouldn't have happened.

        I think if POTUS and the fed actually had that power, the last one wouldn't have happened.

        2 votes
        1. [3]
          RapidEyeMovement
          Link Parent
          My thesis is that we will see Negative Rates and QE before we see a recession that begins before the election.

          My thesis is that we will see Negative Rates and QE before we see a recession that begins before the election.

          2 votes
          1. [2]
            Loire
            Link Parent
            They will not go into negative rates to save Donald Trump, that's insane.

            They will not go into negative rates to save Donald Trump, that's insane.

            1. RapidEyeMovement
              (edited )
              Link Parent
              With Dudley op ed, I think they are painted into a corner Edit: Sorry to expand upon this, and give context Donald Trump started calling the Fed Reserves Chairman Jerome Powell an enemy of him/the...

              With Dudley op ed, I think they are painted into a corner

              Edit:
              Sorry to expand upon this, and give context Donald Trump started calling the Fed Reserves Chairman Jerome Powell an enemy of him/the country. Which the media laughed at and dismissed. Then former NY Fed president Bill Dudley writes an Op Ed Which basically legitimize Trumps tweet.

              I mean this statement by Dudley cannot be ignored

              There’s even an argument that the election itself falls within the Fed’s purview.

              as an aside, with such a boorish blunder it is apropos that his name is Dudley

    2. krg
      Link Parent
      Oh, man... imagine if a democrat were elected to office and this prediction rings true...

      Oh, man... imagine if a democrat were elected to office and this prediction rings true...