Re: Upgraded 4Q99 GDP (due to higher exports)
Zeev and Thread,
More news on how fast the US economy is rolling along. Everyone thought the 5.6% was a barn burner. Now that figure appears like it will be raised to 6%. More bearish news for our bond market (bonds may sell-off and rates rise) but I believe it may already be fully priced in. I think this increase was widely expected after trade figures were released earlier.
MikeM(From Florida)
PS Below the release of the GDP figures is an interesting take of the heated economy by Lawrence Kudlow that's kind of funny.
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U.S. 4th-Qtr GDP Seen Rising at 6% Rate: Bloomberg Survey
(Repeating survey in advance of release at 8:30 EST.)
Washington, Feb. 26 (Bloomberg) -- The Commerce Department probably will revise higher its estimate of the U.S. economy's growth in the fourth quarter, analysts said in advance of a report set for release today.
The government's latest estimate will show that the gross domestic product probably grew at a 6 percent annual rate in the last three months of 1998, according to the average of 33 forecasts in a Bloomberg News survey. That's up from the initial estimate Jan. 29 of a 5.6 percent gain.
The revision to the GDP statistics will be released at 8:30 a.m. Washington time.
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Commodity Prices Show Next Rate Move
New York, Feb. 19 -- Lawrence Kudlow (Bloomberg) -- Commodity prices are breaking down everywhere, the CRB index has dropped to a twenty-four year low and King Dollar is showing new strength. This signals deflationary pressures in the world economy, including the U.S. It also implies a strong commodity value of U.S. money, which is a favorable omen for lower future interest rates and inflation. Actually, the Federal Reserve may be guilty of creating too few dollars, not too many.
Try not to believe everything you read in the newspapers. A bunch of market gurus are filling the airwaves with the usual Phillips curve blather that strong growth will drive up inflation and interest rates. So the Fed stands on the precipice of tighter money. So then bond prices fall and the stock market rally stalls. Blah, blah, blah. Yada, yada, yada. Don't believe a word of it.
Here's an interesting set of facts. Over the past three high growth years, when real GDP advanced at a 3.9% annual rate, inflation averaged a measly 1.4%. However, over the prior five low growth years, when real GDP averaged a measly 2%, yearly inflation averaged 2.8%..... bloomberg.com
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