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Repeats Story Initially Transmitted at 10:00 EST Nov 13
--Inflation Outlook Steady in 2017, 2018
By Jean Yung
     WASHINGTON (MNI) - Economists in the latest Philadelphia Federal Reserve
Bank's quarterly survey marked up their forecasts for growth this year and next
but said they expect inflation toward the Fed's 2% target to slow going forward.
     In the most recent Survey of Professional Forecasters, the 41 surveyed
economists now expect real GDP to rise by 2.6% in the fourth quarter, compared
to 2.3% in the previous quarter's survey. Growth is expected to retreat just a
tad to 2.4% in the first and second quarters of 2018, falling to 2.1% in the
third quarter and ending the year at 2.3%. 
     The surveyed economists still expect inflation to reach the Fed's 2% target
for core PCE by 2019, same as the previous quarter's survey.
     Measured on a fourth-quarter over fourth-quarter basis, the inflation
outlook was overall steady for both the CPI and PCE price index in 2017 and
2018. Core PCE, the Fed's preferred measure of inflation, was marked down a
tenth to an expected 1.4% this year, versus 1.5% in the last survey, but the
forecast for headline PCE stayed the same at 1.5%. Headline CPI is expected to
be slightly stronger at 1.8% forecast from 1.7% in the previous quarter, while
core CPI is expected to be unchanged at 1.7%.
     Inflation has been a sticking point for monetary policymakers as they
consider whether to adjust down their forecasted path for rate hikes this year
and next. However, most officials have said a December move was still
appropriate and markets overwhelmingly expect that to happen.
     "Over the next 10 years, 2017 to 2026, the forecasters expect headline CPI
inflation to average 2.20 percent at an annual rate, down slightly from their
previous estimate of 2.25 percent. The corresponding estimate for 10-year
annual-average PCE inflation is 2.00 percent, unchanged from the previous
estimate three months ago," the survey said.
     When it comes to the other side of the Fed's mandate, maximum employment,
the forecasters revised downward their estimates of job gains to a monthly rate
of 178,000 this year compared to 180,400 previously. Their forecast for 2018
rose to 163,400 from 165,800 monthly in the previous estimate. 
--MNI Washington Bureau; +1 202-371-2121; email: jean.yung@marketnews.com
[TOPICS: MMUFE$,M$U$$$]