FT-IGM March Survey - Post-SVB Expectations

Right here is the trail of progress in accordance with the FT-IGM survey which closed on March 16, a few week after occasions surrounding SVB unfolded.

Determine 1: GDP (black), median SPF (blue), median FT-IGM (tan sq.) and tenth and ninetieth percentiles (tan+), GDPNow (pink sq.), all in billions of Ch.2012$ SAAR. Modal response for recession dates shaded in darkish grey. Supply: BEA 2nd model, Atlanta Federation (3/24), Philadelphia Fed, March FT-IGM surveyand the writer’s calculations.

The FT-IGM survey median was 1% progress within the fourth quarter/fourth quarter of 2023, with the tenth percentile at 0.2% and the ninetieth at 2% (my level estimate was 0.7 %). The median progress fee places the extent of GDP barely above that implied by the median from the February survey {of professional} forecasters (survey accomplished in the direction of the top of January).

Taking the Atlanta Fed’s GDPNow as of March 24 implies primarily zero internet progress in Q2-This autumn. The modal response for the onset of a recession (as decided by the NBER) is 2023Q3 or 2023Q4.

One other attention-grabbing outcome considerations the utmost federal funds fee. The modal response (49% of respondents) was between 5.5% and 6%. This was greater than the height implied by CME futures on 3/15, and even greater on 3/19.

Determine 2: Efficient Fed Funds (black), Implied Fed Funds as of March 22 6:00 PM CT (purple sq.), March 19 4:30 PM CT (pink sq.), March 8 (sky blue inverted triangle), and February 15 (inexperienced triangle). Mild orange shading signifies the modal response for peak charges from the FT-IGM survey. Supply: Fed through FRED, CME Fedwatch, March FT-IGM surveyand the writer’s calculations.

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By moh

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