Current Perspectives

2021 Outlook: The Recovery Year (December 14, 2020)

by Bill O’Grady & Mark Keller | PDF Summary: The economy is in recovery, but the expansion phase of the cycle (where economic output exceeds its prior peak) isn’t likely to begin until 2022. We look for weak first quarter growth followed by more notable strength for the remaining three quarters as the COVID-19 vaccines… Read More »

The Case for Small Caps (December 7, 2020)

by Bill O’Grady, Mark Keller, and Dan Winter | PDF To measure market capitalization, we use the Wilshire Large Cap and Wilshire Small Cap indices. The following chart shows the log-transformed ratio. On this chart, a rising number indicates stronger large caps relative to small caps. In general, small caps tend to outperform coming out… Read More »

The Case for Hard Assets: An Update (September 2020)

by Bill O’Grady & Mark Keller | PDF Background and Summary In this report, we use the term “commodities” to imply “hard assets.”  In our definition, the latter is a commodity that requires multiple years to generate a supply response.  This definition excludes agricultural commodities, which tend to create a supply response on an annual… Read More »

2020 Outlook Update #2: Storm Warning (March 27, 2020)

by Bill O’Grady & Mark Keller | PDF We have been updating our 2020 Outlook to keep you informed of our thoughts as conditions evolve. We have refreshed some of the charts from our update last week and added new comments, included below in bold. Update #2: March 27, 2020 | Update #1: March 16,… Read More »

2020 Outlook Update: Storm Warning (March 16, 2020)

by Bill O’Grady & Mark Keller | PDF Summary—High Probability of Recession: The economy is facing three simultaneous problems: A public health crisis—COVID-19 and the economic impact of containing it; An oil price war and a regional economic slump; Rapidly rising financial stress caused by (a) and (b) along with underlying unresolved issues. We estimate… Read More »

2020 Outlook: Storm Watch (December 19, 2019)

by Bill O’Grady & Mark Keller | PDF Summary – The Base Case: Economy grows at 1.5%; consumption has become the primary driver of growth. Expansion continues to set new records for duration; no recession is our base case in 2020, although there are increasing risks of a downturn. Core inflation max is 2.5% next… Read More »

2019 Outlook: Red Sky at Morning (December 14, 2018)

by Bill O’Grady & Mark Keller |PDF Summary: Economy grows at 2.7%. Expansion makes a new duration record; no recession expected in 2019, although the risk of a downturn will be increasing. Core inflation max is 2.5% next year. Dollar weakens, although the direction is mostly dependent on administration trade policy. We expect preparations for… Read More »

A Primer on Fiscal Policy, Government Debt and Deficits (June 13, 2018)

by Bill O’Grady & Mark Keller | PDF In our travels we are almost always asked about the government debt and deficits.  If there is any area of confusion and misunderstanding, public finance could easily top the list.  In response to these persistent questions, we are publishing this Frequently Asked Questions paper to address some… Read More »

2018 Outlook: Addendum (January 4, 2018)

by Bill O’Grady & Mark Keller | PDF Summary: When we wrote our 2018 Outlook, we were unable to take into account the Tax Cuts and Jobs Act of 2017[1] because the legislation had not been signed by the time we published our report.  This Addendum will address the impact of the tax bill on… Read More »

1 2