Prediction market: Fed on track to hit 4% NGDP growth in 2015

Since December last year the prediction market site Hypermind has been running a prediction market for US nominal GDP growth for 2015 (plus markets for each quarter of the year). I think the development of a prediction market for NGDP growth is extremely interesting and such market can help us much better to understand monetary […]

‘Googlenomics’ predicts sharp rise in US unemployment

It is no secret that I am quite fascinated by the the idea that social media data might be very useful as early/leading indicators of macroeconomic variables. Said in another way I think that social media activity can be seen as a form of prediction markets. So recently I have been tracking what Google Trends is […]

My speaking engagements in Q1 – do you want to see me?

I have been lucky to be very busy since I resigned from Danske Bank back in May – both with my advisory business (Markets & Money Advisory), my commentary and my speaking engagements and all indications are that I will continue to be busy for the rest of the year, but there is still a […]

Hypermind prediction: Nearly 50% probability of Grexit in 2015

Have a look at the latest numbers from Hypermind’s prediction market on the likelihood of Greece leaving the euro in 2015. In my view this likely is also the kind of probability that the rest of the financial markets put on Grexit in 2015 and given the relatively calm reaction in the European markets to recent […]

Jim, it is not complicated – NGDP tells you NOT to hike

This is what St. Louis Fed president James Bullard today told CNBC: “there’s a powerful case to be made that it’s time to raise interest rates. And the case is not complicated. … Policy settings are [in] an emergency. The economy itself, the goals of the committee, have essentially been met.” Bullard goes on to […]

Did Bill Gross get some insight from this blog? Maybe but it might (unfortunately) be outdated

The legendary Bill Gross – formerly of PIMCO and these days Janus Capital – does not believe in a hike from the Federal Reserve this year. This is what he has to say about the issue according to a Tweet from Janus Capital: Fed really tracks Nominal GDP, which since 2012 and last 12 mos […]

The market’s message to Yellen: You have become too hawkish

Recently the communication from the Federal Reserve seems to have become more hawkish. It all started on July 15 when Fed chair Janet Yellen testified in front of the House Financial Services Committee. Yellen among other things said: “If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this […]

Tighter monetary conditions – not lower oil prices – are pushing down inflation expectations

Oil prices are tumbling and so are inflation expectations so it is only natural to conclude that the drop in inflation expectations is caused by a positive supply shock – lower oil prices. However, that is not necessarily the case. In fact I believe it is wrong. Let me explain. If for example 2-year/2-year euro […]

Great news! Scott Sumner Joins the Mercatus Center at George Mason University

Great news – it has just been published that Scott Sumner will join the Mercatus Center at George Mason University and become Ralph G. Hawtrey Chair in Monetary Policy. This is from Mercatus Center’s press release: Arlington, VA, January 13, 2015 – The Mercatus Center at George Mason University welcomes Professor Scott Sumner as the Ralph G. Hawtrey […]

The cost of the Sino-US FX deal: Surging money market rates (in Hong Kong)

This is from Financial Times’ FT Fast this morning: A key lending rate between Hong Kong banks jumped to its highest level since February, potentially making it more expensive to short the renminbi. The overnight CNH-Hong Kong Interbank Offer Rate (Hibor), a daily benchmark for offshore renminbi interbank lending, jumped to 5.446 per cent on […]