Economic Indicators

Can artificial intelligence (AI) platforms based on large language models rapidly analyze interactions among economic growth, inflation and asset class returns? To investigate, we pose to Claude the following prompt:

Please construct charts with U.S. total inflation on the vertical axis and U.S. real GDP growth on the horizontal axis, with annual returns for SPY, TLT, VNQ, GLD and DBC through 2025 plotted as points within the charts.

The selected ETFs are proxies for U.S. stocks, U.S. Treasury bonds, real estate, gold and commodities, respectively. We let Claude decide on exact methodology and formatting. Using responses to the prompt as posed in late September 2026, we find that: Keep Reading

Does the evolving set of artificial intelligence (AI) platforms based on large language models have sensible forecasts for the path of Federal Reserve target federal funds rate? As a simple exploration, we pose to each of Grok, ChatGPT, Claude, Perplexity and Gemini the following prompt eliciting such forecasts:

Please use all information available to date to provide your unique, concise forecast of Federal Reserve Open Market Committee actions on the target range for the federal funds rate over the next 12 months.

We then compile and compare responses from AI panel members. Using responses to the prompt as posed in mid-September 2026, we find that: Keep Reading

Does bitcoin (BTC) return exhibit any exploitable leading or lagging roles with respect to gold (SPDR Gold Shares – GLD) return, change in the all-items consumer price index (CPI) or change in the effective federal funds rate (EFFR) for a monthly measurement interval? To investigate, we compute correlations between monthly BTC return and each of monthly GLD return, change in CPI and change in EFFR for various lead-lag relationships, ranging from BTC return leads other variables by six months (-6) to other variables lead BTC return by six months (6). Using monthly BTC, GLC, CPI and EFFR levels during September 2014 (limited by BTC) through July 2026, we find that: Keep Reading

How do returns of different asset classes recently interact with inflation as measured by monthly change in the not seasonally adjusted, all-items consumer price index (CPI) from the U.S. Bureau of Labor Statistics? To investigate, we look at lead-lag relationships between change in CPI and returns for each of the following 10 exchange-traded fund (ETF) asset class proxies:

• Equities:
  • SPDR S&P 500 (SPY)
  • iShares Russell 2000 Index (IWM)
  • iShares MSCI EAFE Index (EFA)
  • iShares MSCI Emerging Markets Index (EEM)
• Bonds:
  • iShares Barclays 20+ Year Treasury Bond (TLT)
  • iShares iBoxx $ Investment Grade Corporate Bond (LQD)
  • iShares JPMorgan Emerging Markets Bond Fund (EMB)
• Real assets:
  • Vanguard REIT ETF (VNQ)
  • SPDR Gold Shares (GLD)
  • Invesco DB Commodity Index Tracking (DBC)

Using monthly total CPI values and monthly dividend-adjusted prices for the 10 specified ETFs during December 2007 (limited by EMB) through mid-August 2026, we find that: Keep Reading

The Inflation Forecast now incorporates actual total and core Consumer Price Index (CPI) data for August 2026. The actual total (core) inflation rate is a little higher than (slightly lower than) forecasted.

Does economic growth logically and reliably anchor asset class returns? In his July 2026 paper entitled “A General, Scientific Unified Theory of Economic Growth, Asset Valuation and Return: A Common Necessary Constant Evidence for a Natural Law”, Julian Van Erlach presents theoretical and empirical evidence connecting real economic growth (change in real Gross Domestic Product, GDP) to stock market, bond, gold and bitcoin valuations. Based on theory and empirical data for relevant economic variables and asset class returns spanning different sample periods, he concludes that: Keep Reading

Do U.S. business applications, based on Employer Identification Number (EIN) applications associated with new businesses, predict future economic activity and therefore stock market returns? To investigate, we relate changes in both seasonally adjusted (SA) and non-seasonally adjusted (NSA) business applications to S&P 500 Index (SP500) returns at monthly and annual frequencies. In case the relationships are non-linear, we also look at average SP500 returns for negative/positive and extreme changes in business applications. Monthly business application data are released 11-12 days after the end of the observed month. Using monthly SA and NSA business application counts and contemporaneous SP500 levels during July 2004 (limited by the business applications series) through June 2026, we find that: Keep Reading

How do different asset classes interact with the Japanese yen-U.S. dollar exchange rate? To investigate, we consider relationships between Invesco CurrencyShares Japanese Yen (FXY) and the exchange-traded fund (ETF) asset class proxies used in the Simple Asset Class ETF Momentum Strategy (SACEMS) or the Simple Asset Class ETF Value Strategy (SACEVS) at a monthly measurement frequency. Using monthly dividend-adjusted closing prices for FXY and the asset class proxies since March 2007 as available through June 2026, we find that: Keep Reading

How do different asset classes interact with euro-U.S. dollar exchange rate? To investigate, we consider relationships between Invesco CurrencyShares Euro Currency (FXE) and the exchange-traded fund (ETF) asset class proxies used in the Simple Asset Class ETF Momentum Strategy (SACEMS) or the Simple Asset Class ETF Value Strategy (SACEVS) at a monthly measurement frequency. Using monthly dividend-adjusted closing prices for FXE and the asset class proxies since February 2006 as available through June 2026, we find that: Keep Reading

How do different asset classes interact with U.S. dollar valuation? To investigate, we consider relationships between Invesco DB US Dollar Index Bullish Fund (UUP) and the exchange-traded fund (ETF) asset class proxies used in the Simple Asset Class ETF Momentum Strategy (SACEMS) or the Simple Asset Class ETF Value Strategy (SACEVS) at a monthly measurement frequency. Using monthly dividend-adjusted closing prices for UUP and the asset class proxies since March 2007 as available through June 2026, we find that: Keep Reading