This is fuckery of the first magnitude.
The Federal Reserve has become a perverse part of pop culture. Plus, they seem to rule the world. They control the money supply, after all. Now they’re going to compete with one another for making GDP predictions.
Talk about smoke and mirrors and obfuscation.
The NY Fed launched ‘NOWCast’ today to compete with the popular Atlanta Fed GDPNow.
The New York Fed’s model — the “Nowcast” — pegged growth at 1.1 percent for the first quarter, according to its latest update on April 8. Growth in the final three months of 2015 came in at 1.4 percent.
That’s a lot rosier than the Atlanta Fed’s read, which has first-quarter growth at 0.1 percent.
Really, a 1% differential in GDP forecast?
I need this like I need a fucking hole in my head.
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At least Bernanke kept everyone in line. This is either all by design with Yellen controlling the strings or she’s little old granny with the kids running rampant.
Right, all the FED governors keep saying “2 increaes” and then 2-3 days later she has to come back on and talk about looking at data and global issues and calm the markets back down
So if this is intentional, then the Fed is getting what they want. What are they getting? They are getting the market to move sideways.
1% differential in GDP forecast. Anyone here who lived in both NY and Atlanta, who can speak to the difference between them? Or maybe it’s just the particular personalities– or ways of computing GDP expectations– of the particular Fed heads in the 2 different places.
Or maybe it’s just that people in NY are more likely to be on cocaine?
Atl Fed GDPNow:
https://www.frbatlanta.org/cqer/research/gdpnow.aspx?panel=1
NY Fed Nowcast:
https://www.newyorkfed.org/research/policy/nowcast.html
It’s intersting becuase both use model-based calculations – and they use the same data.
More interesting: March 11, the Atalnta Fed was predicting +2.3% while the NY Fed was still at ~1.1%. This means that the Atlanta model is much more sensitive to recent data.
The NY Fed’s GDP model is more tranparent than Atlanta’s. The NYF looks at the data vs the expectations and then assigns a weight. Example:
MoM % change in Exports, Jan ->Feb
Forecasted: +0.229%
Actual (Apr 5): +1.01%
Weighting: 0.054
Revision to NYF 2016Q1 GDP = 0.054*(1.01-0.229) = +0.042%
So the NYF GDP estimate changes more when their forecast value for the data is off, which makes sense.
Here’s something else that I find interesting: the NYF uses a *positive* weight when they look at Imports. Of course, imports by definition *subtract* from GDP. This means one of two things:
1) the NY Fed got their sign wrong in their model or
2) the direct negative effects of increasing imports are more than offset by indirect/correlated positive effects to the economy (ie, if we are importing more, then we are spending more, and probably producing more).
wtf are you people talking about. sold OKE sold RIG sold BAC. three wins. sincerely, the NOT greedy degenerate gambler
The fed is like a hemorrhoid; per Wiki: Hemorrhoids, also spelled haemorrhoids, are vascular structures in the anal canal. In their normal state, they are cushions that help with stool control.
Trouble happens when they become inflamed, swollen, itch, bleed, etc.