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Drew Matus, economist at Merrill Lynch, is throwing more kaka into our forecasting potion (here is the podcast):
- Q2 GDP positive, stimulus checks are fading
- Q3 GDP negative
- Inflation remains very elevated all this year, Bernanke is stuck with 2% Fed Funds rate
- Finally, inflation is dropping sharply down to 1.6% core rate in Q1 ‘08
- Bernanke’s hands are finally free, he will immediately cut another 50 bps down to 1.5% before March
- Nominal GDP growth for the whole 2009 is below 2%
- Unemployment up to 6.4% in 2009
