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FT-Booth September Survey | Economy Browser

As forecast growth continues, the onset of the recession will be further delayed. Financial Times article Survey results: Q4/Q4 growth rate 2% [1.3%, 2.5% 90%ile range].

figure 1: GDP (bold black), Professional Forecaster Survey median (tan), FT-Booth survey median (light red square), GDPNow 9/15 (red square), St. Louis Fed Economic News Index 9/ 15 (pink triangle), the New York Fed now forecasts 9/815 (light blue triangle), all units are 2012 USD 1 billion SAAR. Source: BEA 2023Q2 Second Release, Philadelphia Fed, Booth/University of Chicago, Federal Reserve Bank of Atlanta, Federal Reserve Bank of St. Louis via FRED, Fed.

At the end of 2023, the FT Booth Survey (responses submitted between September 13 and September 15) was more optimistic than the median survey of professional forecasters in August. (My median forecast is 2.2%.) The increasingly optimistic outlook is consistent with the evolution of immediate forecasts.

While the New York Fed and Atlanta Fed instant forecasts remain essentially (or completely) unchanged from the previous week (9/8), the St. Louis Fed News Index has increased from zero to 1.71% (SAAR). Third quarter GDPNow growth (4.9%) is still more optimistic than other immediate forecasts and tracking forecasts.

Given the expected growth path, when do economists think the next recession (as determined by the NBER BCDC) will begin?

source: Booth School (September 2023).

The start of the recession has been pushed back again. Modal response (41%) is for Q1 2025 or later (is this equivalent to a “soft landing”?). Only 25% put the start of the recession in the first half of 2024 (my response).

What does this investigation reveal about the trajectory of federal funds?

source: Booth School (September 2023).

The most typical response is that the federal funds rate peaks at 5.5-5.75%. For context, here are the modal and second-highest responses to date for the federal funds path (5.75%-6%).

figure 2: Federal funds rate, % (blue). Observed data for September is as of September 18. The modal response for the peak fed funds is in light blue and the second highest response is in light blue. Source: Federal Reserve via FRED, Booth School.

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