Earlier this year, people worried that excessive fiscal stimulus would push up inflation and push up long-term yields. Professional forecaster It seems that this result is not imminent.
figure 1: Ten-year constant maturity treasury bond yield (black), CBO (red), administration (blue), August survey of professional forecasters (blue-green), and WSJ July (gray x). The Wall Street Journal’s interest rate is related to the end of the quarter. The date in the figure is related to the final determination of the forecast. Source: CBO budget and economic outlook update (July), fiscal year 2022 budget (June), Philadelphia Federal Reserve SPF (August), Wall Street Journal survey (July).
Since these are different forecasts, it is difficult to see how expectations have changed. I show the last two SPF and WSJ predictions in Figure 2.
figure 1: Ten-year constant maturity treasury bond yield (black), professional forecasters survey August (thick blue-green), May (light blue-green), WSJ July (big gray x) and WSJ April (small gray x) . The Wall Street Journal’s interest rate is related to the end of the quarter. Source: Philadelphia Federal Reserve SPF (August, May), Wall Street Journal survey (July, April).
The long-term yield forecast has been revised down because prospect Because economic activity has weakened (So real interest rates have fallen), market-based inflation concerns have subsided.
The inflation spike is expected to remain temporary, as in This post.
Today, Goldman Sachs lowered its forecast for the third quarter from 9% (SAAR) to 5.5% (while increasing the fourth quarter by one percentage point), mainly based on the impact of delta variants, and partly due to the supply chain (East Asia , China Port, Semiconductor).
