GDP +5.7%

Good news! Real Q4 GDP growth came in at 5.7%. That’s the best growth in over six years. This probably means that the recession is over, even though it still doesn’t feel like it.
Interestingly, the GDP report also showed that nominal GDP increased by a slight 0.81% over the fourth quarter in 2008. This comes after three straight declines. If it weren’t for the lag time, this metric would make a good interest rate peg for the Federal Reserve.
Here’s a look at the Fed fund rates over the same period.
You can see that in the period of 2002 to 2004, the Fed Funds rate was well below nominal GDP growth.

Posted by on January 29th, 2010 at 6:02 pm

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