After a period of economic weakness in August and September, the pace of recovery in most advanced economies gained traction in the past two weeks, though activity is still far below pre-Covid levels, according to Bloomberg Economics gauges that integrate high-frequency data such as credit-card use, travel and location information. Germany and Japan remain at the forefront of the recovery and activity has also increased in France, Italy, and Spain. After months of stagnation, the U.S. is now seeing its recovery pace accelerate, while Canada and the U.K. are now the worst-performing advanced economies BE is tracking.
The activity indexes are estimated using a dynamic factor model. This methodology extracts an unobservable latent common factor of the underlying high-frequency data in the spirit of Stock and Watson. The model is estimated with daily figures from Jan. 1, 2020 to Oct. 6, 2020.
The high-frequency data we’re using have some obvious advantages — providing a more timely read than traditional data series.
But while the ALT index is showing recovery, also with the Atlanta Fed GDPNow Q3 Forecast of 35.2%, Neel Kashkari argues for MORE stimulus.
(Bloomberg) — Federal Reserve Bank of Minneapolis President Neel Kashkari said more fiscal support was urgently needed to support the U.S. economic recovery, following President Donald Trump’s unilateral decision to halt talks for another round of aid.
“Whatever Congress can do with the executive branch — come together aggressively to put money in the hands of people who have lost their jobs and to support small businesses so that we don’t have this continuing wave of bankruptcies across the economy — it’s just vital that they move quickly, whatever they do,” Kashkari said in an interview Wednesday on CNBC.
Trump’s decision Tuesday to walk away from talks with Democrats amid differences over the size of another fiscal relief package — even though hours later he appeared to reverse course — likely ended the chances of a deal before the Nov. 3 election. The president’s announcement followed a speech by Fed Chair Jerome Powell earlier in the day in which he made one of his strongest appeals to date on the need for lawmakers to do more. (NOT ONLY ABOUT THE SIZE OF THE PACKAGE, BUT THE WAY FUNDS ARE DISTRIBUTED AND NEW VOTING RULES ENCOURAGING MORE EARLY VOTING AND MAIL-IN VOTING). AND BAILOUTS FOR STATE WORKER PENSION FUNDS.
The Dow Jones Industrial Average rose this morning after yesterday’s beating in the afternoon.
The Treasury actives and dollar swaps curves are back to normal.
Apparently Pelosi and Mnuchin met this AM about a stand alone bill.