Reader JohnH is unconvinced that the Russian invasion was in any respect essential to the US economic system, in accordance with his feedback to this post. Right here is the revision in GDP expectations going from pre-invasion to post-invasion.
Determine 1: GDP from 1/27/2022 launch (grey), from 3/30/2022 launch (black), February Survey of Skilled Forecasters median (teal), and April WSJ survey imply (pink). Supply: BEA (numerous), Philadelphia Fed, WSJ, and creator’s calculations.
It could’ve been higher to check the SPF to SPF forecasts, however there’s a GDP launch for Q1 which drives an enormous transfer within the stage. Therefore, I examine February SPF to April WSJ. In my expertise, when WSJ survey and SPF come out in the identical month, the median/imply responses are very related.
On this interpretation, the information of the expanded Russian incursion/”Particular Army Operation” lowered end-year anticipated GDP by half of a share level. Nontrivial for my part.
What about inflation expectations. One 12 months forward inflation expectations jumped up within the wake of the expanded Russian invasion.
Determine 2: One 12 months forward y/y CPI inflation expectations, from Michigan survey (blue) from NY Fed median (tan), and from Coibion-Gorodnichenko Survey of Agency Inflation Expectations (sky blue squares). Supply: Michigan College by way of FRED, NY Fed, and SoFIE.
I’d say expectations of inflation rose considerably with the occasion.
Leave a Reply