Ever since Fed officials started talking about raising rates, I and others have raised the spectre of asymmetric risk: the risk that a forthcoming rate hike will lead to slower growth is greater than the risk of faster inflation, and the former would be much more damaging to American households than the latter. Paul K put… Read more
Given that my butt is firmly stuck at the airport due to a 3 freakin’ hour flight delay, and, on the plus side, it’s an airport (Dulles) with a decent wifi, I see no reason not to obsess a bit about this concept of the “natural rate of unemployment,” the jobless rate that’s allegedly consistent… Read more
This AM’s retail sales number offered a bit of a downside surprise, coming in at -0.3% in June against expectations of +0.3%. “Core” retail sales, which excludes a bunch of stuff and correlates with the big consumer spending part of GDP, fell slightly too, leading some GDP trackers to lower their estimates for Q2 GDP…. Read more
The figure below shows a series of forecasts by the Federal Reserve for real GDP growth in 2015, with the first forecast made in March 2013 and the last one made a few days ago. Each bar shows the central range of the forecasts by Fed economists, with the average forecast as a dot in… Read more
Here’s an extended radio interview with Tim Farley on SiriusXM. Not only did he give me the time to get beyond sound bites; he really read the book!