Charts of the Year: 2023’s most popular visualisations, Part II
This week's chart covers the following topics:
The markets’ call on rate peaks proved to be somewhat too low
At the start of 2023, inflation was still running hot. But many observers were confident that central banks had cooled their economies so much that rate hikes surely couldn’t continue for much longer.
Where would rates top out? This chart tapped the futures markets to track the changes to the forecast peak rate (rather than project a rate curve) for the Federal Reserve, the Bank of England and the European Central Bank.
Ultimately, the futures markets were too dovish. As our chart flattened at the end of 2022, terminal rates were predicted at 4.91 percent, 4.42 percent, and 3.35 percent for the Fed, BoE, and ECB respectively in January of 2023.
But there was another leg higher as inflation persisted in mid-2023. By the end of the year, as our updated chart shows, the terminal rates had adjusted to 5.33 percent, 5.21 percent, and 3.90 percent respectively.
(With Chair Powell almost certainly finished raising rates this cycle, the Fed funds rate was kept at 5.25-5.5 percent for a third straight meeting in December; the market settled on its correct prediction of that outcome in mid-summer.)
A reopening index for China
China dismantled its “zero Covid” restrictions at the end of 2022, and as the new year began, there was optimism about Asia’s biggest economy roaring to life.
In March, we built a composite index aiming to capture what economic “reopening” actually means. It used a broad range of daily alternative datasets, including port activity, road congestion, subway use, movie-going and international flights. The chart expressed this composite index in the form of a z-score, or deviation from the historic mean.
The snap-back at the start of 2023 is clearly visible (as is the extent of the plunge in early 2020).
Interestingly, box office revenues and port congestion stayed below the historic mean through most of last year.
Housing slides in Germany, plateaus in Canada, but US resumes records
By early 2023, the transmission mechanism of monetary policy meant higher rates were making mortgages more expensive. In March, we created a chart tracking home prices before and after their peaks.
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Germany and New Zealand were notable for earlier peaks than other countries and substantial declines; Prices in Canada and Norway had barely budged after peaking just six months earlier. The US was somewhere in between.
Fast forward to the present moment: we expanded our chart’s time horizon to 30 months pre- and post-peak for all nations. The US has “reset” to the centre of the chart – i.e., it’s setting new highs again. New Zealand and the Netherlands are recovering; Germany, not so much. And Canada and Norway have still barely budged from their flat line.
Macrobond News
The Macrobond community is giving its forecasts for 2024
With the new year upon us, our customers are providing their outlooks for the global economy.
Check out our latest data additions.
Can’t get enough charts? Usama Karatella and Meghna Shah take you through the newest time series added to the Macrobond universe. They highlight data detailing:
And more than 30 other streams of information, from South Africa to Japan.
What would you like to see in Charts of the Week?
Got a suggestion for an innovative visualisation or interesting subject matter? Write to us at [email protected].
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