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Thread: The Recession..

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    Question The Recession..


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    The Fed Chairperson and the leaders of the government in power will always be more optimistic then warranted by ' their known information'
    After all, this is part of their function and they hope it is in part, self fulfilling.
    So, it is no surprise that even currently, they propagandize.despite known evidence to the contrary.

    Here is the real data they are looking at. The New York Fed makes up 50% of the balance sheet of the Fed.

    They are forecasting an 80% chance of a hard landing recession!!!!

    I am always very skeptical of what government officials, Fed spokespeople and news media state.
    I do look closely at the data though, especially knowing how some of their data is doctored, and if it, even then portends bad news, their is probably some truth in it.

    Give me the below and an inverted yield curve currently between 2 and 10`s and I am a believer. At least with very high probability.

    I am talking about the year we are in and next, not some ambiguous time in the future, just like the Fed`s DSGE report below.

    Invest accordingly, if you find any merit in this. Remember it is just a forecast ( subject to the inputs) but these inputs are almost all trending negatively, so unless those trends change and relatively quickly ( always possible) it may get worse than forecast

    This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since March 2022.

    As usual, we wish to remind our readers that the DSGE model forecast is not an official New York Fed forecast, but only an input to the Research staff’s overall forecasting process. For more information about the model and variables discussed here, see our DSGE model Q & A.

    The New York Fed model forecasts use data released through 2022:Q1, augmented for 2022:Q2 with the median forecasts for real GDP growth and core PCE inflation from the May release of the Philadelphia Fed’s Survey of Professional Forecasters (SPF), as well as the yields on 10-year Treasury securities and Baa corporate bonds based on 2022:Q2 averages up to May 27. In addition, for 2021:Q4 and each subsequent quarter, the expected federal funds rate between one and six quarters into the future is restricted to equal the corresponding median point forecast from the latest available Survey of Primary Dealers (SPD) in that quarter. For the current projection, this is the May 2022 SPD.

    The model’s outlook is considerably more pessimistic than it was in March. It projects inflation to remain elevated in 2022 at 3.8 percent, up a full percentage point relative to March, and to decline only gradually toward 2 percent thereafter (2.5 and 2.1 percent in 2023 and 2024, respectively). This disinflation path is accompanied by a not-so-soft landing: the model predicts modestly negative GDP growth in both 2022 (-0.6 percent versus 0.9 percent in March) and 2023 (-0.5 percent versus 1.2 percent). According to the model, the probability of a soft landing—defined as four-quarter GDP growth staying positive over the next ten quarters—is only about 10 percent. Conversely, the chances of a hard landing—defined to include at least one quarter in the next ten in which four-quarter GDP growth dips below -1 percent, as occurred during the 1990 recession—are about 80 percent.

    Changes in the near-term forecasts for GDP growth and core PCE inflation relative to March reflect two factors. The first is a continuation of the cost-push shocks that have hit the economy since early 2021, resulting in a higher projection for inflation and a somewhat lower projection for output growth. The second factor is tighter monetary policy in 2022 and 2023, with the federal funds rate following a much steeper path over the next year and a half than the one projected in March. This expected path for the policy rate is determined by a version of average inflation targeting (AIT), augmented with anticipated policy shocks and informed by expectations from the Survey of Primary Dealers (SPD), as described above. This tighter policy path compared to March is a drag on real activity over the next few quarters, but it has a limited effect on the projected course of inflation due to the flatness of the model’s estimated Phillips curve.

    The real federal funds rate implied by these forecasts quickly approaches the natural rate of interest, which is around 1 percent, reaching it in 2023 and modestly overshooting it for the rest of the forecast horizon. Partly reflecting the tighter path of policy, the output gap turns negative in the medium term, declining from 0 percent at the end of 2022 to -1.7 percent in 2023 and -2.6 percent in 2024.

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    OIL and SILVER are BOTH Crashing...

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    Super Mario not allowed to resign?
    “The Federal Reserve is not currently forecasting a recession.”
    Fed Chairman Ben Bernanke, January 2008
    This is no longer posted in the Fed Minutes of January 2008, but still quoted here - The FOMC minutes still quote MR. Reifschneider. as stating the same thing.

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