The ECB survey of professional forecasters (SPF) – A review after eight years’ experience

Eight years have passed since the European Central Bank (ECB) launched its Survey of Professional Forecasters (SPF). The SPF asks a panel of approximately 75 forecasters located in the European Union (EU) for their short- to longer-term expectations for macroeconomic variables such as euro area inflation, growth and unemployment. This paper provides an initial assessment of the information content of this survey. First, we consider shorter-term (i.e., one- and two-year ahead rolling horizon) forecasts. The analysis suggests that, over the sample period, in common with other private and institutional forecasters, the SPF systematically under-forecast inflation but that there is less evidence of such systematic errors for GDP and unemployment forecasts. However, these findings, which generally hold regardless of whether one considers the aggregate SPF panel or individual responses, should be interpreted with caution given the relatively short sample period available for the analysis. Second, we consider SPF respondents’ assessment of forecast uncertainty using information from heir probability distributions. The results suggest that, particularly at the individual level, SPF respondents do not seem to fully capture the overall level of macroeconomic uncertainty. Moreover, even at the aggregate level, a more sophisticated evaluation of the SPF density forecasts using the probability integral transform largely confirms this assessment. Lastly, we consider longer-term macroeconomic expectations from the SPF, where, as expectations cannot yet be assessed against so few actual realisations, we provide a mainly qualitative assessment. With regard to inflation, the study suggests that the ECB has been successful at anchoring longterm expectations at rates consistent with its primary objective to ensure price stability over the medium term. Long-term GDP expectations – which should provide an indication of the private sector’s assessment of potential growth – have declined over the sample period and the balance of risks reported by respondents has generally been skewed to the downside.

EU consumers' quantitative inflation perceptions and expectations: An evaluation

This report updates and extends earlier assessments of quantitative inflation perceptions and expectations of consumers in the euro area and the EU using an anonymised micro data set collected by the European Commission in the context of the Harmonised EU Programme of Business and Consumer Surveys. Confirming earlier findings, consumers' quantitative estimates of inflation are found to be higher than actual HICP (Harmonised Index of Consumer Prices) inflation over the entire sample period (2004-2015). The analysis shows that European consumers hold different opinions of inflation depending on their income, age, education and gender. Although many of the features highlighted for the EU and the euro area aggregates are valid across individual Member States, differences exist also at the country level. Despite the higher inflation estimates, there is a high level of co-movement between measured and estimated (perceived/expected) inflation. Even respondents providing estimates largely above actual HICP inflation, demonstrate understanding of the relative level of inflation during both high and low inflation periods. Based on these economically plausible results, the report concludes that further work should be devoted to defining concrete aggregate indicators of consumers' quantitative inflation perceptions and expectations on the basis of the dataset used in this study. Moreover, it outlines a number of future research topics that can be addressed by exploiting the enormous potential of the data set

Omecamtiv mecarbil in chronic heart failure with reduced ejection fraction, GALACTIC‐HF: baseline characteristics and comparison with contemporary clinical trials

Aims: The safety and efficacy of the novel selective cardiac myosin activator, omecamtiv mecarbil, in patients with heart failure with reduced ejection fraction (HFrEF) is tested in the Global Approach to Lowering Adverse Cardiac outcomes Through Improving Contractility in Heart Failure (GALACTIC‐HF) trial. Here we describe the baseline characteristics of participants in GALACTIC‐HF and how these compare with other contemporary trials. Methods and Results: Adults with established HFrEF, New York Heart Association functional class (NYHA) ≥ II, EF ≤35%, elevated natriuretic peptides and either current hospitalization for HF or history of hospitalization/ emergency department visit for HF within a year were randomized to either placebo or omecamtiv mecarbil (pharmacokinetic‐guided dosing: 25, 37.5 or 50 mg bid). 8256 patients [male (79%), non‐white (22%), mean age 65 years] were enrolled with a mean EF 27%, ischemic etiology in 54%, NYHA II 53% and III/IV 47%, and median NT‐proBNP 1971 pg/mL. HF therapies at baseline were among the most effectively employed in contemporary HF trials. GALACTIC‐HF randomized patients representative of recent HF registries and trials with substantial numbers of patients also having characteristics understudied in previous trials including more from North America (n = 1386), enrolled as inpatients (n = 2084), systolic blood pressure < 100 mmHg (n = 1127), estimated glomerular filtration rate < 30 mL/min/1.73 m2 (n = 528), and treated with sacubitril‐valsartan at baseline (n = 1594). Conclusions: GALACTIC‐HF enrolled a well‐treated, high‐risk population from both inpatient and outpatient settings, which will provide a definitive evaluation of the efficacy and safety of this novel therapy, as well as informing its potential future implementation

Consumer savings behaviour at low and negative interest rates

We study interest rates transmission to savings at low and negative rates. Exploiting cohorts of consumers from a data-rich multi-country survey, we show how the strength of interest rate transmission to savings varies with the level of nominal interest rates. This response is positive when interest rates are high but declines steadily at lower levels. At very low levels, there is evidence that the savings response may even reverse sign. Such a "savings' reversal" is consistent with the behavioural evidence on money illusion as well as with a negative signalling effect from policy announcements in a liquidity trap and may weaken the direct stimulatory effects from very low and negative rates. Consistent with this, the reversal appears to be causally related to central bank information shocks and concentrated among older consumers and consumers with lower educational attainment

The ECB survey of professional forecasters (SPF) – A review after eight years’ experience

Eight years have passed since the European Central Bank (ECB) launched its Survey of Professional Forecasters (SPF). The SPF asks a panel of approximately 75 forecasters located in the European Union (EU) for their short- to longer-term expectations for macroeconomic variables such as euro area inflation, growth and unemployment. This paper provides an initial assessment of the information content of this survey. First, we consider shorter-term (i.e., one- and two-year ahead rolling horizon) forecasts. The analysis suggests that, over the sample period, in common with other private and institutional forecasters, the SPF systematically under-forecast inflation but that there is less evidence of such systematic errors for GDP and unemployment forecasts. However, these findings, which generally hold regardless of whether one considers the aggregate SPF panel or individual responses, should be interpreted with caution given the relatively short sample period available for the analysis. Second, we consider SPF respondents’ assessment of forecast uncertainty using information from heir probability distributions. The results suggest that, particularly at the individual level, SPF respondents do not seem to fully capture the overall level of macroeconomic uncertainty. Moreover, even at the aggregate level, a more sophisticated evaluation of the SPF density forecasts using the probability integral transform largely confirms this assessment. Lastly, we consider longer-term macroeconomic expectations from the SPF, where, as expectations cannot yet be assessed against so few actual realisations, we provide a mainly qualitative assessment. With regard to inflation, the study suggests that the ECB has been successful at anchoring longterm expectations at rates consistent with its primary objective to ensure price stability over the medium term. Long-term GDP expectations – which should provide an indication of the private sector’s assessment of potential growth – have declined over the sample period and the balance of risks reported by respondents has generally been skewed to the downside

An Evaluation of the Growth and Unemployment Forecasts in the ECB Survey of Professional Forecasters

In this paper we provide a comprehensive evaluation of the euro area GDP growth and unemployment rate forecasts collected in the quarterly ECB Survey of Professional Forecasters (SPF) over the period 1999Q1–2008Q4. Our results suggest that while SPF forecasts generally appear to be slightly superior to naïve and purely backwardlooking benchmarks, forecast errors nonetheless exhibit a high degree of persistence. In addition, our analysis of the heterogeneity across individual SPF replies suggests that the broad pattern of the individual forecasts is essentially the same as that of the aggregate SPF results. This may refl ect a high degree of commonality in the information available (and not available) to panel members, thus leading them to “get it wrong” (or right) not only in the aggregate, but also individually. In particular, although a small number of forecasters perform substantially above average for some variables and horizons, none does so systematically for all variables and all horizons. Lastly, we have presented and assessed the information about forecast uncertainty provided by the SPF. In line with other studies based on the US SPF, disagreement among panel members does not appear to be a good proxy for overall macroeconomic uncertainty, i.e ., a high degree of consensus is not necessarily an indication of a low level of forecast uncertainty. Our analysis also suggests that, at the individual level, panel members may not fully internalise the overall level of macroeconomic uncertainty. For example, compared with the level of uncertainty indicated by the historical volatility of actual GDP growth and the unemployment rate, the perceptions of individual panel members about uncertainty appear quite low. This possible underestimation of overall uncertainty is much less severe when densities are aggregated across forecasters.

Cardiac myosin activation with omecamtiv mecarbil in systolic heart failure

BACKGROUND The selective cardiac myosin activator omecamtiv mecarbil has been shown to improve cardiac function in patients with heart failure with a reduced ejection fraction. Its effect on cardiovascular outcomes is unknown. METHODS We randomly assigned 8256 patients (inpatients and outpatients) with symptomatic chronic heart failure and an ejection fraction of 35% or less to receive omecamtiv mecarbil (using pharmacokinetic-guided doses of 25 mg, 37.5 mg, or 50 mg twice daily) or placebo, in addition to standard heart-failure therapy. The primary outcome was a composite of a first heart-failure event (hospitalization or urgent visit for heart failure) or death from cardiovascular causes. RESULTS During a median of 21.8 months, a primary-outcome event occurred in 1523 of 4120 patients (37.0%) in the omecamtiv mecarbil group and in 1607 of 4112 patients (39.1%) in the placebo group (hazard ratio, 0.92; 95% confidence interval [CI], 0.86 to 0.99; P = 0.03). A total of 808 patients (19.6%) and 798 patients (19.4%), respectively, died from cardiovascular causes (hazard ratio, 1.01; 95% CI, 0.92 to 1.11). There was no significant difference between groups in the change from baseline on the Kansas City Cardiomyopathy Questionnaire total symptom score. At week 24, the change from baseline for the median N-terminal pro-B-type natriuretic peptide level was 10% lower in the omecamtiv mecarbil group than in the placebo group; the median cardiac troponin I level was 4 ng per liter higher. The frequency of cardiac ischemic and ventricular arrhythmia events was similar in the two groups. CONCLUSIONS Among patients with heart failure and a reduced ejection, those who received omecamtiv mecarbil had a lower incidence of a composite of a heart-failure event or death from cardiovascular causes than those who received placebo. (Funded by Amgen and others; GALACTIC-HF ClinicalTrials.gov number, NCT02929329; EudraCT number, 2016 -002299-28.)