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The first FT-IGM survey of academic macroeconomists


From today’s Financial Times, “Economists predict that by the end of 2023, the U.S. will raise interest rates at least twice”:

A new survey of leading academic economists by the British “Financial Times” shows that rising inflation will force the Fed to raise interest rates at least twice before the end of 2023. The first survey conducted by the Financial Times and the Global Market Initiative of the University of Chicago Booth School of Business indicated that the path of monetary policy may be more hawkish than the Federal Reserve Chairman Jay Powell suggested.

The FT-IGM US Macroeconomist Survey conducted a survey of 52 academic economists, investigating the possibility that the Fed’s main policy interest rate will indeed increase by 0.50 percentage points before the end of 2023, as shown in the dot chart. Most people say that the possibility of taking this scale or larger relocation is more than 75%, while most people think that the possibility is as high as 90%.

Can find non-gated surveys Here. Some points of particular interest to me:

  • GDP q4/q4 growth in 2021
  • PCE 12-month inflation rate in 2021
  • Long-term inflation expectations

These are resolved in the following diagram Survey results.

source: FT-IGM survey, June 2021.

This chart from the Financial Times article shows more detailed information about individual survey respondents’ perceptions of growth and upside/downside risks.

source: Financial Times, June 30, 2021.

My forecast is very close to the median. Although my forecast is skewed to the downside, I am not as pessimistic as some interviewees (within the 90% range). Interestingly, some interviewees are so different-we know that the GDP growth rate in the first quarter is about 1.5% (all growth rates are not calculated annually), and the approaching forecast for the second quarter is about 2%, so We have about half of the fourth quarter/fourth quarter growth already known. Therefore, some forecasters must consider possible major negative factors (such as delta variants, developments in other parts of the world).

source: FT-IGM survey, June 2021.

The median estimate of core PCE inflation is 3%, slightly lower than my estimate of 3.3%.

source: FT-IGM survey, June 2021.

Considering the possibility that inflation will continue to rise, a key factor is the long-term expected inflation (see Graphically explained framework). Here, interviewees seem to think that inflation expectations are well anchored.



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