David Beckworth has constructed a new data series that measures how economy-wide spending and income are performing compared to past expectations, and how the gap between expectations and reality has changed over time. He also offers an explanation of what this data tells us, how it fits into various monetary theories, and how it could improve the Fed’s decisions.

The picture of recent years that emerges from the chart is confirmatory rather than revelatory. The gap grew in 2015 and 2016, when the Fed’s increasing tightness caused what has been called a “mini-recession.” It shrank a lot from 2017 through 2019. Fed policy during the first three years of Trump’s presidency was a little too tight, but still much better than it had been in years.