Key Data Commentary – Tue 20 Mar, 2018

FOMC Preview – By The Data

This information below is from the Calculated Rick blog. I check out the site on a regular basis because I think the author, Bill McBride does a great job of presenting the numbers without any major biases. Getting the actual data is very important to me because it allows for a level headed look at what is going on. Since everyone is watching/waiting for the FOMC meeting on Wednesday let’s check out how the data and projections have moved since the last live meeting…

Click here to visit the Calculated Rick blog for more great information.

The consensus is that the Fed will increase the Fed Funds Rate 25bps at the meeting this week, and the tone might be a bit more “hawkish”.

Assuming the expected happens, the focus will be on the wording of the statement, the projections, and Fed Chair Jerome Powell’s first press conference to try to determine how many rate hikes to expect in 2018 and in 2019.

Here are the December FOMC projections.

Current projections for Q1 GDP range from 1.8% to 2.7%.   There is probably some residual seasonality in the Q1 GDP numbers (pulling down GDP).  So it is too early to revise down 2018 GDP.

At this point, as far as the impact of fiscal stimulus, the Fed has probably incorporated the estimated impact of the tax cuts in their projections for 2018 and beyond.  So the FOMC might increase their projections a little.

GDP projections of Federal Reserve Governors and Reserve Bank presidents
Change in
Real GDP1
2018 2019 2020
Dec 2017 2.2 to 2.6 1.9 to 2.3 1.7 to 2.0
Sept 2017 2.0 to 2.3 1.7 to 2.1 1.6 to 2.0

1 Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.

The unemployment rate was at 4.1% again in February. So the unemployment rate for 2018 will probably be unchanged.

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents
Unemployment
Rate2
2018 2019 2020
Dec 2017 3.7 to 4.0 3.6 to 4.0 3.6 to 4.2
Sept 2017 4.0 to 4.2 3.9 to 4.4 4.0 to 4.5

2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

As of January, PCE inflation was up 1.65% from January 2017.  Based on recent PCE readings, PCE inflation might be revised up slightly for 2018.

Inflation projections of Federal Reserve Governors and Reserve Bank presidents
PCE
Inflation1
2018 2019 2020
Dec 2017 1.7 to 1.9 2.0 2.0 to 2.1
Sept 2017 1.8 to 2.0 2.0 2.0 to 2.1


PCE core inflation was up 1.5% in January year-over-year. Core PCE inflation might be revised up slightly for 2018.

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents
Core
Inflation1
2018 2019 2020
Dec 2017 1.7 to 1.9 2.0 2.0 to 2.1
Sept 2017 1.8 to 2.0 2.0 2.0 to 2.1


In general the data has been consistent with the FOMC’s December projections, so any revision will probably be related to the FOMC’s view of the impact of policy.
Read more at http://www.calculatedriskblog.com/2018/03/fomc-preview.html#p1xedEmruxGQmoAs.99

 

 

View related posts on: ,

Comments:
    • On March 20, 2018 at 9:06 am,
      GH says:

      Tragicomic. Some econometrist ought to measure how much time/$ is being lost in the aggregate in the US, simply discussing government lies.

  1. On March 20, 2018 at 9:19 am,
    CFS says:
  2. On March 20, 2018 at 9:40 am,
    Excelsior says:

    good news announced on numerco’s twitter account today:

    “Energy Secretary R. Perry today told the Senate Energy he’ll suspend sales of excess government uranium onto market for rest of fiscal year”

    9:02 AM – 20 Mar 2018 – @numerco

    https://twitter.com/numerco/status/976126786353401862?s=21

    • On March 20, 2018 at 11:57 am,
      Excelsior says:

      (DNN) (DML) Denison Announces Filing of Technical Report for Wheeler River

      by @marketwired on March 16, 2018

      https://ceo.ca/@marketwired/denison-announces-filing-of-technical-report-for-wheeler

      • On March 20, 2018 at 12:02 pm,
        Excelsior says:

        (UUUU) (EFR) Energy Fuels Issues Letter to Shareholders

        “Make no mistake about it. Our primary focus remains large-scale, profitable uranium production, and we pursue all of our activities in support of this focus. We continue to maintain our industry-leading uranium production capabilities, including licensed and permitted projects that can resume and increase production quickly after a production decision is driven by higher uranium prices. Things are happening in global uranium markets, namely major production cuts, that we believe will rationalize this market and, with it, the return of much higher uranium prices … eventually. Unfortunately, that has been the defining – and frustrating – characteristic of the uranium market over the past few years. We all see the positive supply and demand fundamentals. We see the production cuts, the policies to address climate change and air pollution, and the slow and steady global growth of nuclear energy. However, no one knows when these fundamentals will spawn higher prices, and the recovery has thus far eluded us.”

        “Therefore, in order to preserve our substantial uranium production capabilities, while minimizing shareholder dilution, we continually seek to capitalize on other opportunities isolated from the low global uranium market prices, including new sources of alternate feed materials and fee processing arrangements, land cleanup work, and vanadium recovery. None of our peers share in this quantum of other optionality. In addition, we recently participated in the filing of a 232 Petition with the federal government.”

        “First, we are always “beating the bushes” to find new sources of alternate feed materials and fee processing arrangements for our White Mesa Mill. In 2017, we re-processed about 950,000 pounds of off-spec uranium concentrate for a third party, earning fees of about $6 million. Today, we are talking to several additional parties about new business for 2018 and beyond. In fact, we currently project that the White Mesa Mill will be cash-flow positive for 2018, as it was in 2017 when it was the single largest producer of uranium in the entire U.S.”

        http://www.energyfuels.com/news-pr/energy-fuels-issues-letter-shareholders-3/

    • On March 20, 2018 at 12:39 pm,
      Excelsior says:

      Amir Adnani – Twitter @AmirAdnani

      “Today @SecretaryPerry stated the DOE @Energy #Uranium barter program was to be suspended for the rest of the fiscal year! About 1.6 MM lbs of price insensitive supply removed from the market! We applaud the Secretary, @SenJohnBarrasso and our other supporters on Capitol Hill!”

      12:34 PM – 20 Mar 2018

      https://twitter.com/AmirAdnani/status/976180172218126337?s=19

  3. On March 20, 2018 at 9:59 am,
    Silverdollar says:

    Ref. posted projections by the Fed: Don’t see the Donald’s projected growth figures! Nor do I see the inflation many are touting…………Looks to me like they simply project the present into the future until proven wrong, which they will be!
    Here’s a beautiful chart from Kimbel: https://kimblechartingsolutions.com/2018/03/nasdaq-market-ride-watch-divergences/?utm_source=ActiveCampaign&utm_medium=email&utm_content=Is+The+Nasdaq+Market+Ride+Over%3F+Watch+Those+Divergences%21&utm_campaign=Daily+Kimble+Blog+Posts+RSS

    • On March 20, 2018 at 11:42 am,
      GH says:

      “Looks to me like they simply project the present into the future”

      Just like they did in the late 90s, projecting surpluses as far as the eye can see based on the blow-off years of an unprecedented bull market. Totally disingenuous, but good for politicians and helpful for Goldman Sachs to unload on muppets.

      • On March 20, 2018 at 4:13 pm,
        Ozibatla says:

        This is exactly what is going on within Australian government. Predictions of when our budget returns to surplus is based on what happened in the past during the mining boom. Hence, the predictions of surplus are continually pushed further into the future. Therefore it begs the question: When will our government actually return to surplus? In todays world of spend and borrow, no time soon.

  4. On March 20, 2018 at 10:47 am,
    Excelsior says:

    DISCIPLINED DIVERSIFICATION – MFS

    “Everyone wants to be in the best-performing asset class every year. The thing is, few people are savvy enough to consistently choose the best. That’s why
    diversification is key. This chart shows annual returns for eight broad-based asset classes, cash, and a diversified portfolio ranked from best to worst.”

    https://www.mfs.com/wps/FileServerServlet?articleId=templatedata/internet/file/data/sales_tools/mfsp_20yrsa_fly&servletCommand=default

    • On March 20, 2018 at 11:42 am,
      GH says:

      Great chart, thanks Excelsior.

      • On March 20, 2018 at 12:03 pm,
        Excelsior says:

        It was interesting to note where “Commodities’ have been on that list. Only one place to go from there ^^

        • On March 20, 2018 at 1:09 pm,
          GH says:

          A waterfall down into negative real values? 😉

          • On March 20, 2018 at 5:15 pm,
            Excelsior says:

            haha!

  5. On March 20, 2018 at 12:15 pm,
    Excelsior says:

    Nasdaq 100 now worth a greater percentage of U.S. GNP than during Tech Bubble

    Source: Bloomberg

    http://cdn.ceo.ca/1db2n9m-Screen%20Shot%202018-03-20%20at%2019.11.54.png

    • On March 20, 2018 at 12:16 pm,
      Excelsior says:

      “It’s The Same This Time…” ‘FANG’ Valuations Reach Dot-Com Peak

      Tue, 03/20/2018

      “It’s not different this time”… in fact it’s exactly the same! The same level of exuberant retail ‘buying the top’, the same level of ‘nothing can stop us now’, the same level of ‘what recession?’, and most importantly the same level of insane valuations for the mega-tech leaders…”

      “Mom-and-pop are all-in…”

      https://www.zerohedge.com/news/2018-03-20/its-same-time-fang-valuations-reach-dot-com-peak

  6. On March 20, 2018 at 12:17 pm,
    Excelsior says:

    Bittrex to Cut Listing of 82 Altcoins from its Exchange

    Aziz Abdel-Qader | Tuesday, 20/03/2018

    “The majority of the delisted altcoins had broken blockchains, were abandoned by developers, or were designed as scams.”

    https://www.financemagnates.com/cryptocurrency/exchange/bittrex-cut-listing-82-altcoins-exchange/

  7. On March 20, 2018 at 12:22 pm,
    Excelsior says:

    Cobalt price: Automakers ‘waking up too late’ as China takes control
    Frik Els | about 2 hours ago

    http://www.mining.com/cobalt-price-automakers-waking-late-china-takes-control/