US macro

US GDP data was released overnight.

You can see US NGDP pokes back up above the LR trend. Fully recovered!

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Now, about those policy settings..!

It is interesting to note the relationship between the 1yr ahead NGDP forecasts, from the Survey of Professional Forecasters, and the US 10 yr treasury yield. Whilst you can see a clear bend in the slope, by decade, the c2020’s are very unusual. At the very least, the historical relationships suggested by economic theory supports a higher treasury yield story, than what prevails today (a 10 yr yield below 2%).

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Durable goods, also out overnight, tells a similarly positive story. Ordinarily, one would have begun to normalise policy settings, given the kinds of cyclical strength we see below, and what the inflation data tells us about the aggregate supply curves.

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Please note that past performance is not a reliable indicator of future performance.

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