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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FED
NY Fed staff have published an update for their DSGE model forecasts and how it compares with their Dec’23 update.
- “Once again, the model was surprised by the strength of the economy. The model attributes this forecast error in part to higher-than-expected productivity, and in part to stimulative financial conditions.”
- GDP growth is seen stronger this year at 1.9% Y/Y in 4Q24 (revised from 1.2%), before an unrevised 0.7% Y/Y for 4Q25.
- Yet the mean forecast sees core PCE inflation at 2.0% Y/Y for 4Q24 (revised from 2.2% in the Dec update) and 2.0% for 4Q25 (unch from 2.0). It’s then followed by a slightly larger uplift to 2.1% in 4Q26 and 2.2% in 4Q27.
- “The expected path of the policy rate is essentially unchanged relative to December. The model continues to see policy as being restrictive through the end of 2024”
- They see the real natural rate of interest drifting from 2.1% in 4Q24, to 1.9% in 4Q25, 1.6% in 4Q26 and 1.4% in 4Q27.
Source: NY Fed
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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