Retail spending is forecast to rise 3.6 per
cent in nominal terms - in line with 2017, but well below the 20 - year average of 5.3 per cent.
Not exact matches
In contrast, medium -
term inflation expectations implied by financial market prices, which are calculated as the difference between
nominal and indexed bond yields, have been broadly stable at around 2.6 per
cent over the past nine months.
According to the ABS Capital Expenditure Survey, firms expect to increase spending on machinery and equipment investment
in nominal terms by only 1 1/2 per
cent in 2000/01, once average realisation ratios are applied.
Medium -
term inflation expectations of financial market participants, as implied by the difference between
nominal and indexed bond yields, have risen to around 3 per
cent in October, from less than 2 per
cent at the beginning of the year.
For expenditure on machinery and equipment, growth of around 2 per
cent is expected
in nominal terms.
The June quarter ABS capital expenditure (Capex) survey points to solid growth of machinery and equipment investment
in real
terms in 2003/04, although
in nominal terms, investment is expected to fall by 3 per
cent (assuming a five - year average realisation ratio), reflecting lower prices for investment goods.
The report showed that from December 2017 to the end of February the debt stock
in «
nominal terms» went up by
cents 2.5 billion from January to February 2018.
At a 10 - year Treasury yield of 1.7 %, interest on reserves of 0.25 %, and a monetary base now at about 18
cents per dollar of
nominal GDP (see Run, Don't Walk), further purchases of long -
term Treasury securities by the Fed would produce net losses for the Fed
in any scenario where yields rise more than about 20 basis points a year, or the Fed ever has to unwind any portion of its already massive positions.
«
In terms of liquidity preference, a completion of QE2 requires liquidity preference to increase to 16 cents per dollar of nominal GDP - easily the highest level in histor
In terms of liquidity preference, a completion of QE2 requires liquidity preference to increase to 16
cents per dollar of
nominal GDP - easily the highest level
in histor
in history.
As I noted this past January
in Sixteen
Cents: Pushing the Unstable Limits of Monetary Policy, a collapse
in short -
term yields to nearly zero is a predictable outcome of QE2, based on the very robust historical relationship between short -
term interest rates and the amount of cash and bank reserves (monetary base) that people are willing to hold per dollar of
nominal GDP: