Monetary Policy In Uncertain Times Paula Tkac Senior Vice - - PowerPoint PPT Presentation
Monetary Policy In Uncertain Times Paula Tkac Senior Vice President & Associate Research Director The views expressed here are my own and do not necessarily reflect the views of the Federal Reserve Bank of Atlanta or the Federal Reserve
The views expressed here are my own and do not necessarily reflect the views of the Federal Reserve Bank of Atlanta
2 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2 4 6 8 10 12
1 1 1 1 1 1
FRB Dallas Trimmed-mean PCE inflation- year over year percent change Unemployment Rate - monthly, percent
FOMC’s judgment of the longer run unemployment rate (4.4%)
Sources: Bureau of Labor Statistics; Haver Analytics Inflation data through August 2019, Unemployment data through September 2019
FOMC’s Inflation target (2%)
2018 2019 2020 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
Quarterly percent change, SAAR
Actual
4
Sources: Bureau of Economic Analysis, October 2019 Blue Chip Economic Indicators; Haver Analytics.
Blue Chip projections Actual data through 2019:Q2 Long-run GDP forecast (1.8%)
5
2014 2015 2016 2017 2018 2019
5 10 15 47 50 53 56 59 62
Core Capital Goods Orders (nondefense ex.aircraft) y/y percent change (left axis) ISM Manufacturing: PMI Composite Index, sa (right axis)
ISM 50+=expansion
Sources: Census Bureau, Institute for Supply Management; Haver Analytics Core goods data through August 2019, ISM data through September 2019
6 2015 2016 2017 2018 2019 70 80 90 100 110 120 130
Index = 100 January 2015–December 2018
Expectations Uncertainty
Source: Federal Reserve Bank of Atlanta/Chicago Booth School of Business/Stanford Survey of Business Uncertainty; data through September 2019
The Business Expectations Index reflects firms' expectations about the growth of their own sales, employment, and capital expenditures over the next 12 months. The index can respond to news about the
The Business Uncertainty Index reflects firms' uncertainty about the growth of their own sales, employment, and capital expenditures over the next 12 months. respond to the same forces that move the Business Expectations Index. The Business Uncertainty Index captures uncertainty about the outlook for sample firms, while the Business Expectations Index captures the expected direction and magnitude of change. Each index is standardized to have a mean of 100 and a standard deviation of 10 in the period from January 2015 to December 2018.
7 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2 4 6 8
Real PCE and Disposable Personal Income year-over-year percent change
Real Disposable Personal Income Real Personal Consumption Expenditures
Volatility due to year-end tax changes
Source: Bureau of Economic Analysis; Haver Analytics data through August 2019
Volatility due to year-end tax changes
8
September 2019 Maximum (outer ring) Minimum (inner ring) Median (middle ring)
Sources: BLS, NFIB, Conference Board, Haver Analytics; staff calculations data through September 2019
9
10
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Number of respondents : 416
Source: Survey of Business Uncertainty conducted by the Federal Reserve Bank of Atlanta, Stanford University, and University of Chicago Booth School of Business.
Number of respondents : 385
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Number of respondents : 416
Source: Survey of Business Uncertainty conducted by the Federal Reserve Bank of Atlanta, Stanford University, and University of Chicago Booth School of Business.
Number of respondents : 418
13
14 Source: BEA; Authors’ calculations using data from the Survey of Business Uncertainty conducted by the Federal Reserve Bank of Atlanta, Stanford University, and the University of Chicago Booth School of Business.
Notes: Column (1) reports the capital-stock weighted mean of firm-level responses to SBU questions about whether tariff hikes and trade policy tensions caused the firm to alter its capital expenditures in the first half of 2019 and, if so, by what percentage amount. To obtain the private sector dollar value in column 2, we multiply the column 1 figure by of the 2019:Q2 value of nominal private nonresidential fixed investment in the U.S. Bureau of Economic Activity’s National Income and Product Accounts and then by ½ because the data are reported in seasonally adjusted annualized rates. For manufacturing & construction, we multiply by the corresponding nominal value for the manufacturing (construction) sector in 2018, scaled up by an adjustment factor of 1.0091. We compute the adjustment factor using the percentage growth of private sector investment expenditures from 2018:Q4 to 2019:Q2. Column 3 reports the number of survey responses used to calculate column 1. Standard errors reported in brackets.
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Source: Federal Reserve Board 2019 2020 2021 2022 2023
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
Percent