Economic Forecast

An economic forecast is a prediction of what future periods of economic activity will be in various categories. This could be a prediction of the overall economy through the gross domestic product (GDP), employment levels, inflation, interest rates, and numerous other subcategories. Economic forecasts are designed to help companies and investors allocate capital.

Recent economic data signals a modest improvement of economic activity and current economic forecasts going into 2015 have been increased. As is the case, however, when dealing with future events, unforeseen shocks can turn an economic forecast upside down very quickly.

The U.S. Federal Reserve has clearly indicated that it intends to increase short-term interest rates as soon as U.S. economic activity improves from its current level. The central bank’s economic forecast for economic activity and employment has improved for 2015, but it’s still unclear as to when the central bank will effect its first change in interest rates in a number of years.

Is China a Ponzi Scheme?

By Monday, June 11, 2012

Chinese economyWe continue to see the Chinese economy slow down, which is based on numerous sources both within the government and independent firms. The economic forecast of China has continued to move down according to many people, including myself. However, the worry is that if the economy were to crash suddenly, it would have a severe impact on t… Read More

Will the Real Inflation Rate Please Stand Up?

By Thursday, March 8, 2012

economic forecastThe American Institute for Economic Research (AIER), a not-for-profit research group, believes that the Consumer Price Index (CPI)—as measured by the government—does not reflect the true inflation rate in this country.

The AIER believes that the true cost of living should include everyday items that consumers must spend mo… Read More

China’s Economic Growth to Come Crashing Down?

By Thursday, March 8, 2012

In terms of what economic growth will look like in 2012, the mainstream is sticking to the “muddling along” economic forecast theory.

Just as in 2011, the economic forecast talk is of the U.S. being fine and that we will “muddle along” economically. I’ve been watching markets for 30 years and I’ve never seen economies “… Read More

Lower Rates and More Money Printing:
Just What We Don’t Need

By Thursday, December 8, 2011

This morning comes the news that the European Central Bank (ECB) has just cut interest rates again (for the second straight month) to one percent—the lowest level on record for the ECB. There is immense pressure on European leaders and the International Monetary Fund to bail out the troubled eurozone countries. The easiest way to bail them out is to issue more euros, somethingGermanyhas been steadfastly against. Increasing the money supply has been one of the Federal Reserve’s tools to stimulate growth in the U.S. during the recession.

Stock Market and Economic
Forecast for June 2011

By Monday, May 30, 2011

Just as the Federal Reserve is winding down its $600-billion QE2 monetary stimulus program, the latest releases of U.S. financial data increasingly point to another slowdown in the American and global economies.

Being a technically focused analyst, I generally don’t mull over the numerous fundamental data considered to be leading or lagging indicators for the economy too much. Instead, I prefer to look for guidance to the yield chart of 10-Year U.S. Treasuries.