Good News! St Louis Fed ENI Q1 Real GDP Growth Projected To Be 3.50%!

By Anthony B. Sanders

But Yield Curve Signals “Winter is Coming!”

St. Louis Fed Economic News Index, their real GDP “nowcast,” projects Q1 growth at 3.50 percent, up from its previous week’s projection of 3.36 percent.

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As former Fed Chair Ben Bernanke said in Sintra, Portugal, last year, the current aging economic cycle “appears to have room to run.”

Yes, the Treasury yield curve flattening verifies that the economy has “room to run.” The 10Y-2Y spread (or curve slope) is narrowing like it did in 2005, two years prior to The Great Recession (that started in Q4 2017) according to the National Bureau of Economic Research (NBER).

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So while the US economy is growing at a 3.50% clip, the yield curve is forecasting an end  to what Bernanke called “the aging economic cycle.” That is, winter is coming.

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