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"Not the Fed Tealbook": August 2023 Edition is Already Out

In a world filled with data, varying interpretations can lead to different economic forecasts. With significant uncertainty, especially around policy interest rates, this analysis seeks to outline potential scenarios to guide policymakers and market players.

The latest edition of the "Not the Fed Tealbook" is already available on The better Policy Project's website:


Global Economy:

Advanced economies, especially in the Euro Area, face challenges from the Ukraine conflict's aftermath. China's unexpected economic slowdown further muddies the waters. The oil market remains unpredictable, with minor changes capable of swinging prices significantly.


Domestic Economy:

The U.S. saw a 2.4% GDP growth in 2023Q2, led by investment but with waning consumption. Despite demand concerns with key trading partners, a strong household balance sheet and rising wages might spur domestic demand. However, recession risks persist.


Labor Market:

A 6% YoY wage growth presents inflationary challenges. The high job vacancies-to-unemployment ratio suggests wage inflation could remain elevated, necessitating a close watch.



While headline inflation is decelerating, primarily due to goods inflation, rising wages threaten to push service sector prices up. Policymakers must monitor core inflation closely for long-term stability.


Financial Markets:

Post the Silicon Valley Bank collapse, interventions have stabilized the banking sector. However, concerns about the sector's ability to handle high interest rates amidst macroeconomic challenges remain.


Monetary Policy:

With a 3.1% CPI inflation in June, a continued tight monetary stance is crucial. The focus is on prioritizing long-term stability while ensuring the financial system's resilience.


The "Not the Fed Tealbook" delivers a nuanced macroeconomic analysis of the US economy, grounded in the principles of the FPAS Mark II framework. It treats monetary policy as a risk management exercise. Rather than honing in on a solitary baseline scenario, our analysis delves into both the upside and downside risks, scrutinizing how monetary policy responds to these dynamics.

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