The Research HUB: How to use ChatGPT for economic data

Linear Extrapolation

Markets always price a distribution of probabilities and shift as marginal changes take place. This is why you need to monitor the level and rate of change in data. One of the ways you can do this is by using ChatGPT.

Side note on projections: All the quants and math nerds could rip apart what I am going to show you. And then you have all the stochastic guys like Taleb that would say I am the reason the world is a mess (cool man). At the end of the day, when we make projections of economic data, it isn’t about figuring out what will exactly take place. We are simply trying to identify what is unlikely and compare it to market pricing. Most trades are less about knowing precisely what the future will hold and more about knowing what is broadly unlikely.

(Live view of the “experts”)

Big Picture:

The market is always pricing a forward path for the actions of the Fed.

However, this expected policy path is rarely predictive of what will actually happen. Here is a chart of the implied vs actualized Fed Funds rate:

Anyone who tells you that the bond market is the “Market of truth” has zero understanding of how interest rates or macro works. The bond market and the forward curve are literally almost always wrong. I wrote a whole breakdown of it here:

Now if you want to understand how to analyze inflation better in how it relates to growth and interest rates, check out this article:

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ChatGPT:

At this point, I have a lot of ChatGPT bots running processes and models for me. Some are very simple and some are more complex. I am going to share a simple yet important one here so that you can begin to understand inflation moving into 2024.