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How Trade Uncertainty Is Crushing Economic Optimism

Summary:
Or, Trumpian Winning, edition 3,010,524. From Torsten Sløk/Deutsche Bank today: And here is the Baker, Bloom and Davis categorical policy uncertainty index for the US, plotted against the 5yr-3mo Treasury spread highlighted by Campbell Harvey. The EPU-trade index jumps as the spread accelerates its decline. Figure 1: Trade policy uncertainty categorical index (blue, left scale) and 5yr-3mo Treasury spread, % (red, right scale). Source: policyuncertainty.com and Fed via FRED.  For more on the likelihood of recession, see here.

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Or, Trumpian Winning, edition 3,010,524. From Torsten Sløk/Deutsche Bank today:

How Trade Uncertainty Is Crushing Economic Optimism

How Trade Uncertainty Is Crushing Economic Optimism

How Trade Uncertainty Is Crushing Economic Optimism

And here is the Baker, Bloom and Davis categorical policy uncertainty index for the US, plotted against the 5yr-3mo Treasury spread highlighted by Campbell Harvey. The EPU-trade index jumps as the spread accelerates its decline.

How Trade Uncertainty Is Crushing Economic Optimism

Figure 1: Trade policy uncertainty categorical index (blue, left scale) and 5yr-3mo Treasury spread, % (red, right scale). Source: policyuncertainty.com and Fed via FRED. 

For more on the likelihood of recession, see here.

Menzie Chinn
He is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

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