Stock prices and the mean expected NGDP growth rate rose for the second straight week, resuming a run for stocks that has culminated in a more than 10% gain, year-to-date. Inflation expectations, while falling slightly, remained a bit above the Fed’s desired target.
Last month’s PCE inflation data was issued Friday, with year-over-year core PCE continuing its downward trend.
This mirrors the trend for NGDP:
So, while recent NGDP growth remains above the long-run trend, it has none-the-less been heading in a more sustainable direction, with forward-indicators of focus in recent weeks confirming that the trend is expected to continue.
Hence, the expected soft landing is still on, though again, inflation expectations are getting into a bit of a danger zone. A little monetary tightening could better shore up expectations for sustainability of these positive expectations.
Note: This post, as is the case with all my posts, should not be construed as offering investment advice. Such advice should be tailored to the individual investor by qualified professionals who, ideally, are fiduciaries.
Links to Data: