Markets to Fed: We’re Easing Whether You Like It or Not

Markets to Fed: We’re Easing Whether You Like It or Not

The financial markets now recognize that the Recession has arrived, and given those markets, it’s time for the Fed to stop tightening, if not beginning to lower rates. And because the Fed isn’t doing that, the markets are doing it for them. Not that the Fed will like it. The Fed, of course, does care; […]

Outlook: 2023 Recession Likely Deeper and Longer

Last year, our year-end outlook blog was titled: Outlook: 2022 Growth Will Likely Disappoint. And disappoint, it did. Real GDP was negative in Q1 and Q2, and while Q3 showed a slight bounce, through Q3, the economy’s annualized real growth was less than +0.2% (that’s not a typo). Thus, last year’s outlook headline couldn’t have […]

Markets See Recession – But Not The Fed

The CPI for November (+0.1% M/M) was milder than markets expected, which brought the Y/Y CPI inflation rate to 7.1% in November from 7.7% in October. The core CPI (ex-food and energy) rose +0.2% M/M, the smallest increase since August 2021. Excluding shelter, the Core fell -0.1% for the second month in a row, an […]

The Data Say Recession and Inflation are Cratering

But This Fed Continues to Raise Rates Since October, long-term interest rates have fallen. On October 18, the 10-Yr Treasury Bond was yielding 4.226%. It fell to 3.408% on Tuesday (December 6) and closed at 3.587% on Friday (December 9). Short-term rates are closely tied to the Federal Funds rate, the administered rate set by […]

Employment Report – Not What Meets the Eye

Fed Near End of Rate Hikes The big news today was that payrolls increased by +261K. This caused markets to rally (shoot first, ask questions later). Interest rates moved up because the headline +261K may cause the Fed to be even more hawkish. Nevertheless, beneath the veneer, this was a very weak employment report. There […]

Why Q3’s GDP Print Doesn’t Mean Recession Avoidance

The only saving grace of the GDP report was its headline +2.6%. As it turns out, Net Exports added 2.8 percentage points, and for the wrong reasons. Excluding Net Exports, the domestic economy’s GDP growth was -0.2%. The Recession continues. While the country still has a large negative balance of trade, it is the change […]