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By Guest Blogger Ryan Lewenza
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The markets are in flux right now as investors try to figure out whether we’re heading into a dreaded recession or whether the US/global economy will endure a ‘soft landing’ as I’ve been calling for. Admittedly there is no shortage of concerns right now with inflation running at a 40-year high, the war in Ukraine, Fed rate hikes and Shanghai under a complete Covid-19 lockdown. Despite these headwinds it’s far from a slam-dunk that we’ll see the US/global economy fall back into recession in the coming year.
Today I’ll outline the case for why I see the US/global economy going through a mid-cycle slowdown, rather than a full-throated recession.
Last week we got some big news on this front with the release of first quarter GDP for the US economy. At first blush it was a disappointing report providing fodder to the bears. But like most things, there is more than meets the eye with this economic report, and I think it’s way too early to throw in the towel on the critical US economy.
The US economy experienced a small contraction in the first quarter of the year with US real GDP down 1.4% in the quarter. This follows the very strong fourth quarter of 2021 where the US economy grew at a breakneck speed of 6.9%. Some are pointing to this as proof that the US economy is on the precipice of falling back into recession but we’re not too sure.
US Economy Contracted in Q1 but Economists call for Q2 bounce
Source: Bloomberg, Turner Investments
A recession is defined as two negative quarters back-to-back. I believe the first quarter was weighed down by the resurgence of Covid-19 cases from the Omicron variant and from one-offs that are likely to reverse in the coming months.
First quarter GDP was negatively impacted by a surge of imports, which increased 18% as shipping congestion eased. Imports are a subtraction in the calculation of GDP. This alone subtracted 3.2% from GDP in the quarter. But critically, underlying demand in the country, which is called Final Sales to Private Domestic Purchasers, rose at a healthy 3.7%. This shows good demand and strength in the US economy.
Consumer spending, business and residential investment were all strong in the quarter, which again supports our view that the US economy is quite strong at present.
Economists see the US economy bouncing back in the second quarter with GDP growth of 3%. So if this occurs then we won’t see back-to-back negative prints and therefore no recession in the near-term.
For the full-year consensus is for the US economy to grow at 3.2%, which is pretty solid growth and in-line with the long-term average.
We’ve definitely seen a softening of economic data recently with the ISM manufacturing index declining this month and with this weak GDP number. But we’re still hopeful that the US economy can avoid a recession over the next year as the labour market remains incredibly strong with a record low 3.6% unemployment rate.
Until we see this shift and start seeing sustained job losses, we believe the US economy is simply slowing from last year’s robust growth.
US Unemployment Rate is at a Record low 3.6%
Source: Bloomberg, Turner Investments
What else is positive?
First, from a business cycle perspective we’re still in the early days of this economic expansion. The last recession, which was brought on by the pandemic in early 2020, likely ended during the summer of 2020. So using this as our rough start date of a new expansion period, we’re only in the fifth quarter of this new expansion cycle, which as seen in the chart below, is far below the average expansion phase of typically 21 quarters. To use a baseball analogy, based on history, we’re only in the third to fourth inning of this nine inning ball game.
If I end up being wrong on this call and the US economy does fall back into recession this would be only the second ‘double-dip’ recession since 1950. The last one was in the early 1980s when the US economy experienced two back-to-back recessions in quick succession.
Is it possible that the US economy falls back into recession? Sure, but as the data suggests it would be very rare for this to occur so quickly after the last recession.
Length of Past Expansion Cycles for the US Economy Measured in Quarters
Source: Bloomberg, Turner Investments
Second, I see inflation peaking soon, which if correct, will help to alleviate concerns around inflation and slow the expected Fed rate hikes. Headline US CPI hit a 40-year high of 8.5% y/y in March, which is exactly why you saw the Fed hike 50 bps this week. Expectations are for a few more 50 bps hikes over the next few meetings and for the Fed Funds Rate to hit 2.75-3% by end of the year. But I think current expectations may turn out to be too hawkish and we’ll end up seeing the Fed hike less than what is currently priced into the market.
In the inflation chart below I include current consensus expectations for inflation and economists see CPI peaking soon and then declining to 5.7% y/y by end of the year. If this plays out then the Fed is likely to moderate their rate hikes, which right now is the most pressing concern among investors.
US Inflation Could be Peaking Soon
Source: Bloomberg, Turner Investments
Finally, probably my favourite indictor for predicting US recessions – the 90-day T-bill and 10-year yield curve – remains steeply positive and therefore has not ‘inverted’. As discussed in past blogs, an ‘inverted yield’ curve has occurred ahead of most US recessions and we’re not seeing this at present.
In fact, the Fed has a model that predicts the probability of a US recession in the coming 12 months, which is based on this specific yield curve, and it’s currently only implying a 6% probability of a US recession over the next 12 months.
US Fed Recession Probability Model
Source: Bloomberg, Turner Investments
It’s a very challenging time right now as the market and investors are trying to determine whether these headwinds (inflation, war etc.) will push the US/global economy into a recession.
As I’ve outlined today I see the US economy slowing but no major recession for this year. If proven correct on this thesis then markets should stabilize and power higher later this year as these headwinds fade.
Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Investment Advisor, Private Client Group, of Raymond James Ltd.
100 comments ↓
While watching the price of a Tesla being ripped out of my retirement portfolio every week, it’s hard to share your cautious optimism. I know, I know … just don’t watch. But I’m a glutton for punishment, allowing the bloodsport of politics to occupy far too much of my headspace.
What did we say about picking individual stocks? – Garth
Keep bumping those rates up until CPI is at a reasonable level.
Mortgage holders be damned.
A Nigerian Prince emailed me and told me the winner of today’s Kentucky Derby was going to be Cyberknife.
I sent him $100 for his hot tip…
M47BC
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“Charted: U.S. Consumer Debt Approaches $16 Trillion.
According to the Federal Reserve (Fed), U.S. consumer debt is approaching a record-breaking $16 trillion. Critically, the rate of increase in consumer debt for the fourth quarter of 2021 was also the highest seen since 2007.
Home prices have experienced upward pressure since the beginning of the COVID-19 pandemic. This is evidenced by the Case-Shiller U.S. National Home Price Index, which has increased by 34% since the start of the pandemic.
Driving this growth are various pandemic-related impacts. For example, the cost of materials such as lumber have seen enormous spikes. We’ve covered this story in a previous graphic, which showed how many homes could be built with $50,000 worth of lumber. In most cases, these higher costs are passed on to the consumer.
Auto loans, on the other hand, are following a similar trajectory as mortgages. Both new and used car prices have risen due to the global chip shortage, which is hampering production across the entire industry.
To put this in numbers, the average price of a new car has climbed from $35,600 in 2019, to over $47,000 today. Over a similar timeframe, the average price of a used car has grown from $19,800, to over $28,000.”
https://www.visualcapitalist.com/us-consumer-debt-16-trillion/
Thank you for the very detailed and informative post today Ryan. I really enjoy the charts/graphs you folks provide in the blog. Looking at 82’ and it’s short 4 quarter expansion period is a little unsettling but as the saying goes “stay the course”.
@#98 Ponzie’s Pediatrician Problems
“No doctor shortage.
Just too many sick people.”
++++
There are 900,000 British Columbians without a family doctor.
https://www.cbc.ca/news/canada/british-columbia/victoria-doctor-shortage-1.6427395
The “universal health care” is a myth.
I also find it somewhat ironic that our “Minister of Families” is encouraging (thousands? millions?) of US women to come to Canada for an “abortion.”
https://www.cbc.ca/news/politics/canada-provide-abortion-access-american-women-1.6440238
Good to know our Provincial medical system can handle the influx of thousands of more patients per year at the wave of a Federal Liberal Ministers’ hand…..
Never in history has the fed successfully engineered a soft landing, or successfully predicted anything.
They are always late and reactionary, just like with the most recent “transitory” inflation.
Omicron was weaker than the annual flu.
How can traditional business cycles be applied when all major financial, economic and geopolitical factors combined have never been seen before – and they are all negative.
@#104 bdwy
“the farce at the border is now only a silly charade.”
+++
Apparently the charade continues with US and Canadian Customs.
The Stanley Cup Finally teams (Oilers vs Kings) competing in games in the US were flown to Vancouver, bussed across to Bellingham airport ( just across the line) and flown to L.A.
Why?
If you drive across the border…. no Covid protocols required…..
The Covid Customs inanity continues.
“You don’t get any profits from fundamental analysis; you get profit from buying and selling. So why stick with the appearance when you can go right to the reality of price and analyze it better?” — Richard Dennis
stocks are already in a bear market. they have a lot further to drop.
deal with reality.
3.0 FED rate will bring Dow to 22k, S&P to 2200 and Nasdaq to 6900 and than it will be QE to infinity again if not than more downside.
Garth … I was refering to the price of a Tesla vehicle, not their stock price. I have not the time, the nclination, nor the knowledge, to deal with individual stocks. B&D broad index ETFs only.
Ryan, thanks for sharing the data and your analysis – it is always appreciated.
I’m confused by the “US Fed Recession Probability Model” chart. The latest date on the chart is 5/1/2017. So five years ago. Is the chart mislabelled or am I missing something?
Good post. Thanks Ryan.
I see no reason for a recession. Inflation is necessary to balance the expanded money supply so that plus interest rate bumps will create bouncing, but all good companies are perfectly positioned with booming economy, full employment, reestablished supply chains.
Ignore the pearl-clutching. Buy the dips. We’re in one now. Prepare for the next golden era of investing. Costco is good value.
So, turns out vaccine with tracking chips were not needed, you were already chipped and trackable with your smart phone.
Ooops…we didn’t know we were tracking THAT much information about Canadian citizens, says the MP of Ethics. Yeah yeah…sure sure.
If communists could have only foreseen the capabilities to control and track their citizens that technology would provide…
#7 crowdedelevatorfartz on 05.07.22 at 10:46 am
The Covid Customs inanity continues.
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I, for one, am happy to accept many slightly irritating Covid protocols. No other single event in my lifetime has doubled our household net worth in three short years. Counting our blessings.
Technology is creating immense opportunity in medicine, communications, energy, material science, physics, engineering, biology, etc….
Interesting thing about inflation, deflation, stagflation & value… it is relative.
Today liquidity matters, assets impacted, set the scales accordingly. Tomorrow, we’ll see.
Going against the crowd here, picking individual value in the “Next” ….betting on human ingenuity with minor alterations to diversification and alternatives. Recession or not.
Inflation has been building up for a long time.
It is here to stay.
Even when the easily identifiable contributors ie supply chain, war, etc are removed, the structural components remain.
Too much money supply at warp velocity is the first on the list.
Unemployment is at record lows, interest rates still negative, cost push still in the pipeline, and no corporations/producers, with pricing power, will roll back prices.
The mess that the central bankers have created is unprecedented.
The probable outcome, and solutions also unprecedented.
#108 Shirl Clarts on 05.06.22 at 11:50 pm
#102 Faron on 05.06.22 at 10:28 pm
#69 Shirl Clarts on 05.06.22 at 6:38 pm
It appears you are making a stink about something that’s actually trivial to try to prove a point. Canada guarantees re-entry to her citizens. No where does CBSA say they will send you to the US for testing if you are a Canadian citizen. Any and all non citizens can be denied entry for any reason as has always been the case for every free sovereign nation out there.
I travelled last July and was given an at home test kit upon my re-entry and allowed to do it when I arrived at my house. I returned to Canada infected with COVID last August and was given entry under conditions of mamdatory quarantine and non stop driving home. The ferry was interesting (they gave our car the downwind half of an upper deck).
Never have I feared being rejected at the border.
Just go. Take your trip. It’s not hard. You live in a free country and will be travelling to another free country. Enjoy it.
And, yes, those three bullets make perfect sense.
The Bank of Canada’s balance sheet has been shrinking for over a year now!
Lots of complainers and doomers and arm-chair economists have bitterly trashed the Bank of Canada for buying government bonds with printed money and growing its balance sheet.
Indeed the bank of Canada’s total assets or balance sheet size rose from $120 billion March 11, 2020 (start of pandemic) to $575 billion one year later. Massive growth.
But since peaking over one year ago, that balance sheet is now down 18% or $105 billion to $471 billion.
Yes there is a long way to go, but shouldn’t the central bank bashers now be giving the Bank of Canada some credit for reducing its balance sheet and starting to do so already over a year ago?
See details on this great interactive web page:
https://www.bankofcanada.ca/rates/banking-and-financial-statistics/bank-of-canada-assets-and-liabilities-weekly-formerly-b2/
P.S. Someone has to come to the defense of our central bank when it is down and being kicked. So I have stepped in to do so.
Au contraire.
Russian deflation.
Before this, our MFA Luigi di Maio estimated Italia had seized about €900 million in Russian assets.
And now this:
“Italy orders seizure of yacht linked to Putin” [USD $700 million]
https://www.bbc.com/news/61357256
Oz, happier yet than the UK.
https://www.abc.net.au/news/2022-05-07/italy-seizes-superyacht-scheherazade-russian-government/101046540
Americans just as happy (of course they mentioned their USD $90 million yacht seizure so they don’t feel left out).
https://www.cnbc.com/2022/05/06/italy-freezes-superyacht-linked-to-vladimir-putin.html
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As for Italia Gov & MSM…
Crickets.
Not even our Guardia di Finanza mentioned it (GDF = CRA with an Army, Navy and Airforce – why Italians pay their taxes).
Whatever it takes.
Viva L’Italia & the EU.
Slava Ukraini.
Congrats to the Fizer Salesman of the month: Faron.
Would I expect any less in this country filled with passive Sheeple who’ve dedicated their lives to enforcement of this new global system? Contracts have been signed and Kanada is a test bed for the new global digital ID. Fact. Why we are the only place with domestic ‘travel passports’.
Learn how the game is payed lads.
Even local media is calling out the Cvidians. They’ll never tell you about the Digital ID project.
https://nationalpost.com/opinion/rupa-subramanya-why-is-canada-dragging-its-feet-on-getting-back-to-normal-from-covid
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–Xi Jinping sends warning to anyone who questions China’s zero-Covid policy (cnn.com)
— Pets…the BS is ramping up. China was filmed destroying peoples’ dogs recently. Watchout.
.Pet dogs are being probed as a potential cause of a mysterious hepatitis outbreak striking children across the world. Health chiefs claim a ‘high’ number of the sickened children, who are aged 10 and under, come from families which own dogs or have had ‘dog exposures’ (www.dailymail.co.uk)
May 11, 2022, at 8:30 A.M. Eastern Time.
When the US April 2022 CPI data are scheduled to be released.
[In my Google Calendar]
Soon after, we will see if your hypothesis is correct Ryan, peak reached or at least slowing down – signalling recovery in Mr. Market.
Erudite, compelling Blog today.
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I happen to agree with you Ryan overall.
Only twist will be how big an impact inflation will have on large GDP segments like Retail Trade in the US in the interim?
Consumer Spending a huge part of their GDP, if I recall about 70%, more than in Canada.
Even with a peak inflation reached, it will take MONTHS for Consumers to recover and prices to fall, if the latter ever do.
Time.
Biggest component of inflation is Boomers globally taking their 40 years of experience and retiring. Higher rates won’t fix supply (footwear, apparel next to go up). It will push Boomers out of stocks as they can’t handle the volatility increasing cost of capital. Summary, high productivity retirees replaced by smaller workforce = GDP shrinking annual even as we remain at full employment.
The Bank of Canada should also be explaining its role in printing money and increasing the money supply.
If you search “printing money” on its web site you come across two articles from 2020 which basically try to say that buying bonds was not really printing money.
Stephen Poloz in a “Teachable Moments” speech of April 30 2020 said it was not really printing money since it would be temporary. (Is that like transitory?)
An article on August 25, 2020 claimed “How are we paying for these assets? There is a common misconception that we are just printing money, but this isn’t the case.”
At this point the Bank of Canada owes the public some articles on how their actions did increase the money supply and how actions by others (borrowers) did as well. And if and when this will be reversed.
It’s not credible for the Bank of Canada to be silent about all the money printing it is accused of doing, much less to rely on the two 2020 articles that claimed they were not really printing money at all.
Transitory and Peak inflation.
All most people care about is sustained inflation not peak. Like when are gas and diesel prices going back down to the cheap days of $1.49 a liter? When is the price of food coming down? Next come the strikes for wages. History doesn’t repeat but human nature makes it rythme.
The geo political and economic scene that enabled the last 30 years is changing once again. That should also be factored in.
If the Fed wants to use peak inflation to moderate rate hikes…so be it. Group human nature on full display.
J “I’m confused by the “US Fed Recession Probability Model” chart. The latest date on the chart is 5/1/2017. So five years ago. Is the chart mislabelled or am I missing something?”
Good catch! That’s just a charting error. The data is accurate but I must have grabbed the wrong date period when I created the chart. – Ryan L
#12 Sail Away, #14 Sail Away.
Ditto. Ditto.
Except for Costco.
We have Conad.
If you want Costco, we also have the tawdry French Carrefour.
——————–
Italia buys local, in its neighborhoods. Smaller stores. More community.
And no Chickens the size of an OSTRICH in Italia.
No N. American “selective breeding” practices. Gnarly looking fruit and veggies devoid of GMO and RoundUp.
When they come Italia they love the cuisine and how good the food tastes.
1/2 cuisine
1/2 produce
Why it cannot be imitated in N. America.
La scienza in cucina e l’arte di mangiar bene – Italia (and not Costco).
Sounds like short term bond funds should start coming back to life!! Though about ZWU as a replacement but utilities are so non diverse…
Lies, damn lies and statistics. You think that any of those stats are accurate?? Unemployment- ALL time low?? Wow- there is going to be a reckoning.
#20 TurnerNation on 05.07.22 at 1:28 pm
They’ll never tell you about the Digital ID project.
—
they.
A simplifying heuristic I apply in my life is classifying as a fool anyone who can’t speak with any specificity about who “they” are. Others do this to you too FYI.
But, you are right. Your SIN has been in a computer database for at least 40 years now as has mine and my SSN. CBSA shares data across borders linked to your passport and has done so for a long time. Informing citizens of the facts of digital manifestations of ID is like telling someone that cars have wheels.
Soft Landing on 05.07.22 at 10:44 am
If you mean softening a recession, how about the pandemic? The one that we are just coming out of? It could have been really bad, but it wasn’t, economically speaking.
IDK
#126 Sail Away on 05.07.22 at 11:43 am
let the people decide.
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The majority of Americans support a person’s right to choose to have an abortion and limits on government interference on all sexual freedoms.
How is guaranteeing a freedom an over reach? The contortions (white and often male) Christian conservatives like yourself are putting themselves through to make this sound like anything other than a fundamentalist Christian morality power grab are really impressive. Cirque du Soleil is in your future Sail Away.
To be clear, the leak of Alito’s draft opinion was abhorrent and a huge breach of the sanctity of a court that is critical to the US’s power balance. There is no justification for what happened.
The bond market is having its worst sell off in 200+ yrs, interest rates keep rising, so imagine all the the potential credit defaults coming.
SPX YTD is the worst such decline in 80 years.
The NASDAQ is down 24% in six months..
So when more and more people keep selling stocks and put their cash in money market funds, do you think any of those underlying bonds will fail?
This is the ultimate pooch, frozen money market accounts.
So where do you stuff the cash?!?
Warnings emerge that CPI will hit and then pass 10 % with the real inflation double that.
At the same time the central bankers are talking about 2.5 – 3 % ‘neutral’ rate which really is negative double digits real rate. That removes any traces of credibility left in central bankers.
So when should we expect 15 + % rates ladies and gentlemen charlatans at the central banks so you can have your ‘reputation’ back?
Kapitalism in Kanada. Why oh why is the national newspaper giving this print? Hint hint the soft sell, predictive programming. There is no more real news…
GOD HELP US.
“British economist Mariana Mazzucato wants to remake capitalism by shaping economic growth around objectives such as tackling social inequality and sustainability. Her ideas attracted the interest of British Columbia’s Jobs, Economic Recovery and Innovation Minister, Ravi Kahlon, who sought out the economics professor at University College London, and she spent a year helping draft a new economic plan for the province. In a telephone interview with The Globe and Mail’s Justine Hunter, Prof. Mazzucato explains the concepts behind the new “Stronger BC” economic blueprint, which is designed to build back from the pandemic and the climate catastrophes of 2021.” (globeandmail.com)
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Control over our Travel. This is the direct result of Science in Kanada. Nowhere else it it like this with layers of outdated CV rules and checks + the public sector unions firing those which would not submit themselves to medical procedures. Comrade have your Domestic Passport ready for inspection.
https://www.blogto.com/travel/2022/05/toronto-pearson-airport-delays-connecting-flights/
People have been encountering absolutely brutal lineups at security and customs, many of them missing their flights as a result, especially connections.
Additional checks for new documentation such as proof of vax, proof of a negative C**ID test (if travelling to a country that requires it), and/or ArriveCan (for those on their way home and connecting in Canada) have also been slowing things down and causing people to miss flights.
A lot of economists say that covid isn’t actually considered a recession but a mere temporary blip in the boom cycle since 2009. If true, it would throw all your thoughts out the window
The other problem I see is I don’t believe inflation will suddenly drop in the 5% range like the chart predicts. Every single time rate hikes were made it takes a little bit of time before the full effects are seen. What makes this so different?
Second, I see inflation peaking soon, which if correct, will help to alleviate concerns around inflation and slow the expected Fed rate hikes.
M2 excesses up to date are enough for 3 more years of 10 % + CPI, read real inflation double that.
The peak projected rate ceiling is 3 % but at 2.5 % the debt based economy will severely slow down.
The stock market is very overvalued due to money printing and 15 years of zero interest.
The Dow should retreat to 2018 levels without fed reserve boosters at full throttle.
So many silly companies like Uber would not exist if drivers had to pay 10% interest on a new car.
Watch out below.
https://www.currentmarketvaluation.com/models/buffett-indicator.php
Fighting inflation of 15 %+ with 1 % rates is like trying to stop a forest fire with the content of your bladder.
The impact from the very high inflation, capped salaries and ‘indexed’ benefits on real consumer spending will be catastrophic. GDP will slowly grow but real consumption will severely decline as we are at peak debt, constraint income and increasing prices.
This will hit discretionary consumption and employees big time.
Real standard of living can easily decline by at least 30 % in just a few years.
If the is a Russian oil embargo….what happens then?
With regards to yesterdays conversation regarding ArriveCan I can say it absolutely is a barrier for those of us older Canadians who don’t have a cell phone. Yes , some of us are still stuck in the 20th. Century.
If I am just going to pop across the border to do a bit of shopping I can fill it all out from my home computer. But a friend and I in past days went to several multi day events down in the good old U.S.A. each year. Friend is even older than I am. Neither of us can even turn a Smart Phone on or off let alone make it actually do something for us. Hard to fill out the App from home when you don’t even know what day you will be returning , let alone what time .
Let’s see $750 – $1500 for the *&#* Phone in the first place , then what, $80.00 / month plan charges. All for a piece of hi tech crap that I will never use except for this barrier to returning to my home country.
Both of us are trying to get by on tin plated pensions, neither of us needed a hand held frustration device for the first 75% of our lives. It really burns to be forced into spending this sort of $ just to get back home.
So yes, a barrier to travel !!
#33 Howdy on 05.07.22 at 3:08 pm
Exactly. Where do you stuff all the cash? It has to go somewhere, and with higher inflation, it has to be converted sooner rather than later.
It will have to go into assets eventually, which is why stocks and yes real estate is the place to be during higher inflation (after the initial over reaction that is).
We are in a buying opportunity with the over reaction in the markets.
IDK
“Powell’s Inflation Strategy Takes Fire From Ex-Top Fed Officials
Chair takes the most heat from ex-colleagues since the 1970s
Former officials predict a recession and much higher rates.
While Chair Jerome Powell has won united support from the current Federal Reserve policy making team for his latest gameplan to pull down inflation, he’s facing heated criticism from former colleagues, including his recent top lieutenants.
Richard Clarida, who was Powell’s vice chair until January, said this week that interest rates will have to go to levels his former boss hasn’t acknowledged. Randal Quarles — until October Powell’s other vice chair, for supervision — was harder hitting, saying the team ought to have started battling inflation last September, and the Fed now faces a likely recession to bring prices under control…
Other observers have chipped in with remonstrations over Powell having on Wednesday taken a three-quarter percentage point rate hike off the menu of options in the immediate future. Former Treasury Secretary Lawrence Summers said Friday he was “surprised that he took it off the table as firmly as he did.”
Powell on Wednesday signaled the current plan is for the Federal Open Market Committee to mount two more half-point hikes in June and July, after raising the key rate by that amount this week. He said he wasn’t sure if rates would need to rise to levels that restrict economic activity — in contrast to a raft of former officials who have no such uncertainty.
The criticism from former colleagues is the sharpest and most widespread since the 1970s, when inflation was rising to more than 10%, and policy was led by Arthur Burns and G. William Miller, “who had no idea how to deal with inflation,” Robert Barro, a Harvard University economist, said Friday.
Consumer prices in U.S. post largest annual advances since early 1980s
“This is unusual,” said Ethan Harris, head of global economics at Bank of America Corp. “The Fed is not going to come out and say ‘we made a mistake,’ but I do think they understand they waited too long. The criticism I think was warranted and has probably helped to gel opinion on the committee” to step up the inflation fight, he said.
In one bit of stark criticism, former Minneapolis Fed President Narayana Kocherlakota compared the Fed’s oversight of the U.S. economy to a country music song about a reckless driver.
“It’s actively turning in the wrong direction — the kind of mistake many a driver has made when hitting a patch of ice,” Kocherlakota wrote last month.
The criticism is a notable contrast to the relatively gentle treatment Powell has faced in congressional appearances following an extensive campaign to build relations with both Republicans and Democrats. While he’s still awaiting confirmation to a second term at the Fed’s helm, it’s a near certainty that the Republican renominated by Democrat Joe Biden will win overwhelming support in the Senate.
Powell, who’s not a Ph.D. economist and is known for speaking plainly, sought this week to address the economic concerns of ordinary Americans with a direct appeal at the start of his press conference Wednesday.
“Inflation is much too high and we understand the hardship it is causing, and we’re moving expeditiously to bring it back down,” he said. Consumer prices surged 8.5% in the most recent reading, the highest annual rate in 40 years.
While ex-Fed officials agree with the need to move expeditiously, they place blame on the chair for not having done enough already.
“This is a problem of their own making,” Charles Plosser, a former president of the Philadelphia Fed, said in a Bloomberg TV interview. While the Fed chair was right to highlight the dangers of inflation Wednesday, “‘I don’t know where that Powell was 12 or 18 months ago,” Plosser said.
Quarles, who never dissented in his policy votes, nonetheless said the FOMC was too slow to react to rising inflation last year. He also blamed the delay on uncertainty over the future of the Fed’s leadership, as Biden took months to decide on pending nominations. “Had clarity been provided, I think the Fed would have acted earlier,” Quarles said….
via Bloomberg. Yesterday.
Have you talked to a real FARMER in British Columbia
recently. The cost of fuel, supplies etc , the planting
weather. labor shortage and fertilizer cost .Also
supply chain problems make it difficult to get
materials to run the farm and difficult to get their
farm products to market. A classic example is a chicken
farmer on the Saanich Peninsula has had their feed grain costs soar but the price they get for their chickens remains very low set by the Agriculture Review Board. They are at the mercy of this board which will take a few months to look at an increase
in the price they get. We’ll see what things will look like in NOVEMBER 2023 with 5 to 7 interest rate increases.
Central banks screwed up, catastrophically Ryan, plain and simple. And many of us saw this long ago. There is no “real” happy ending possible here. Just BS stats and more gaslighting trying to convince you that all is just peachy while your bank account is mysteriously obliterated. Jerome and his ilk painted themselves deep into a corner and must choose between true double digit inflation destroying the standard of living for most people, or continue to criminally prop up financial assets.
I’m sorry is inflation “peaking” supposed to be comforting? So get used to these insane prices as they only climb 10 percent annually from now on? Or even 2 percent? How about ripping the bandages off and deflate this ridiculous gas bag once and for all and build real economies with free markets? Never again allowing Central Bank intervention and manipulation.
Unthinkable right?
#124 Observer on 05.07.22 at 10:18 am
IHCTD9
It has been amusing watching you try to weasel out of your words. So, you agree now, the issue is not really about”the leak”, it’s about taking away freedoms.
———-
Stop with the historical revisionism. I’ve asked you twice now, this’ll be the last time:
Is my support for abortion in and of itself good enough – or not?
Quit dancing around and just answer the question bro.
In response to the short amount of quarters since the 2020 recession; Have governments ever responded with stimulus as quick as they did in 2020? It sort of feels like we are heading into a delayed recession from that spring 2020. They just printed their way out of it and now we have the resulting inflation. Maybe the soft landing could have started early this year but then the war in ukraine created another bunch of issues.
I hope you’re right though.
@#29 faron
“A simplifying heuristic I apply in my life is classifying as a fool anyone who can’t speak with any specificity about who “they” are”
+++
I’m shocked!
Shocked I tell you.
That you would mock the “pronoun liberated” in our society.
“They” are the new “he/ she/ they” on govt business cards everywhere throughout Canada.
@#39 Summertime
“Fighting inflation of 15 %+ with 1 % rates is like trying to stop a forest fire with the content of your bladder.”
+++
True enough but, (and ironically I might add)…when the post covid summer time partying is over and the Visa bills start arriving in the email inbox in Sept….
That’s when the bank rates will slowly dawn on the great unwashed proletariat holding fat HELOC’s, mortgages and credit card balances..
U.S. Q1 GDP was a miss because of Covid. This isn’t the case with Q2 so Q2 should be positive, no recession in near sight. As for the rest… assuming m2 numbers are accurate in the chart below:
https://ycharts.com/indicators/us_m2_money_supply
What we’ll note is a dramatic uptick in m2 in 2020 as a consequence of U.S. Fed policy translating into record amounts of credit and the creation of new money seen with steep gains in real estate, stocks, bonds, and in some respects even giving $ away. This ends up in peoples accounts, they spend more jacking demand which creates full employment and everyone is happy… until of course, inflation hits.
If Milton Friedman is right with the timeline, when the money supply is increased, it takes 2 years from the creation of money to inflation. With the Fed buying its own bonds and MBS’s, this timeline would be compressed from 2 years to between 2 years and 18 months. This means that when we look at the m2 chart (go to 10 year to see the true significance of m2’s rise), the 20 year average prior was 7% yoy. In Trump’s last year in office, it was nearly 4 trillion higher clocking around 27% yoy.
When you put this kind of wealth into people’s pockets on with assets ascending to an everything bubble, they spend and by spending, it accelerates demand creating the mother of all wealth effects i.e., the everything bubble! Naturally, super accelerated demand will lead to supply shocks especially so coming off a pandemic where commodity prices for example were soft and exploration and development mothballed.
Couple a rapid increase in the money supply spawning super accelerated demand with pandemic related supply chain disruptions and what do we get? High inflation. Supply/demand fundamentals out of whack. Throw in some war and La Nina drought and we get this train wreck of high inflation we see now. This is egregious policy from the Fed and by proxy, Washington btw and I speak specifically with 2020 in mind since this is the timeline where the major damage was done.
How long will it last? Once again, Milton Friedman says “inflation is always and everywhere, a monetary phenomenon”. It’s easy logic. Extra cash chasing the same number of widgets or post pandemic supply shocks in some cases less numbers of widgets and prices go higher.
Once again, Friedman says it’s about 2 years for prices to normalize from a rapid increase in the money supply. Friedman also cautioned that it takes 2 years to reverse the effects of inflation with a decrease in the supply. If m2 is anything to go by (it is), one would think that May or June would be the peak since it was June of 2020 since the big spike in m2. But since then, m2 has risen by 12% from June of 2020 to June of 2021 meaning that CPI inflation we see presumably in the 9’s will be around the ball park for at least another year.
So, while talking heads look for a so called peak, what the markets can much more significantly expect is a plateau of sticky high inflation that lasts for a solid year or more from what we see today.
In other words, so called “peak inflation” is no solace if it remains persistently high which it will considering 2.75% at years end is roughly economically neutral. MT could change that with the Fed sucking money out of the supply through the sale of bonds forcing yields higher tightening credit beyond raising the Fed rate, but it’s effects won’t kick in fully until Q4 and will take time. If recession is the only cure to inflation, this would help it.
But I caution, if inflation is high into recession and the Fed has run out of room to raise rates to lower inflation (I think 3.5% is their wall), a very likely scenario over the winter I might add, we will have high inflation and rising unemployment i.e. stagflation arriving somewhere from this winter until at least the summer of 2023.
Since recessions have a tendency to overshoot, this could spill into the 2024 election year where anything can happen from ugly market bottoms, fiscal train wrecks and re-electing the same kleptocrats (Trump and company if he lives that long) that created this mess to begin with offering a whole new set of problems as a period of repression and austerity kicks in assuming there is any political will to do it.
The cure for inflation, if we haven’t figured it out yet, is to suck somewhere between 2.5 and 3 trillion bucks out of people’s pockets over the next 2 years or so. We’re going to try to square that with a hopium “soft landing”? Doomer opinions suck I’ll admit, but I unfortunately in this case find them to be more realistic.
All fine & dandy on the US and not betting against america and that
But what about the pipsqueak economy next door and the numbnuts running it?
Nigerian Airlines no longer operating domestically because jet fuel is too expensive. First airline of many to shut down.
(https://guardian.ng/news/local-airlines-to-shut-operations-monday-as-jet-a1-hits-n700-litre/)
expect this to happen with food in many countries as they get priced out of staples (a-la Sri Lanka)
MicroStrategy is about to blow up. $2.5B in debt on $500M in revenues. 2027 bonds now trading at 60 cents. … going to zero.
Russians don’t give a damn about sanctions. this is what they think of stupid Western Sanctions
(https://twitter.com/WallStreetSilv/status/1522878917039865857?cxt=HHwWgoC-4c6TraIqAAAA)
don’t poke the bear
#32 Faron on 05.07.22 at 2:55 pm
To be clear, the leak of Alito’s draft opinion was abhorrent and a huge breach of the sanctity of a court that is critical to the US’s power balance. There is no justification for what happened.
———————
Far too much power in the hands of the judges in America.
Justice should be blind and not beholden to dogma.
Let there be leakage, I say.
Hey Cuke and Tomato,
Please explain the difference between a “farmer and a real farmer”???
I don’t think anyone thought the US would have negative growth in the first quarter. That was before the Fed started increasing rates. The reason the Fed is increasing rates is to slow down demand. So I believe the odds are very high that they go into a recession
For Turner Nation: …..”Contracts have been signed and Kanada is a test bed for the new global digital ID. Fact….”
https://www.youtube.com/watch?v=0VUyoKM1Cyc
#31 Faron on 05.07.22 at 2:27 pm
#126 Sail Away on 05.07.22 at 11:43 am
let the people decide.
———
The majority of Americans support a person’s right to choose to have an abortion and limits on government interference on all sexual freedoms.
How is guaranteeing a freedom an over reach?
———-
The mandate of the Supreme Court is to uphold the constitution, not follow whims of the populace. As I understand, RvW has always been legally problematic. But I am by no means a legal expert.
Here’s Justice Alito expert analysis:
https://www.documentcloud.org/documents/21835435-scotus-initial-draft
@#51Grunt
“But what about the pipsqueak economy next door and the numbnuts running it?”
+++
I think you answered your own question.
The last thing we need is the complete politicization of the central bank, as PP is campaigning on. He is dead wrong. That would be dangerous beyond comprehension. – Garth
If the BoC plans to implement a new digital currency, Canadians should have a say, should we not?
A third can’t pay monthly bills. Now you want them to design a currency? – Garth
Absolutely not. But they’re doing it anway and they’re doing it without our consent. PP opposes this and I agree with him. If the central bank intends to transform Canada into a cashless Orwellian dystopia, I think that’s a political issue.
From the Globe and Mail:
Pierre Poilievre says a lot of things. And sometimes, Mr. Poilievre has a point.
Last week, the Conservative leadership candidate said that, if he becomes prime minister, he would bar the Bank of Canada from issuing a central-bank digital currency.
It’s not entirely a new idea. A Republican legislator has made the same pitch in the United States. A central-bank digital currency, which the Liberal government said in its recent budget it would consider, has grave implications for privacy.
It is true that, in an increasingly cashless economy, our payments are already tracked by all manner of private companies, such as banks and credit-card companies. But everyday transactions are not directly tracked by the government or law enforcement. If they want to see that data, they would need to approach these private companies with a good reason, such as a warrant or a court order.
A central-bank digital currency, on the other hand, cuts out the banks and credit-card companies. It’s essentially an electronic payment system directly controlled by the government.
The Bank of Canada would no doubt like that because it can thus implement its monetary policy, usually a blunt instrument, in a more micro-targeting way. Who knows – maybe that’s a good thing for fighting the inflation the federal institution has been trying so hard to tame.
But having all our financial data directly in the hands of the government is a frightening thought.
The leader in the world of central-bank digital currencies is China, which already has a working product in use by some of the population. Why has China been so eager to develop one? Critics of its human-rights record have long said that a digital currency would enable even greater surveillance and control.
https://www.theglobeandmail.com/opinion/article-poilievre-has-a-point-on-central-bank-digital-currencies/
#50 Diamond Dog on 05.07.22 at 5:20 pm
“[This} means that when we look at the m2 chart (go to 10 year to see the true significance of m2’s rise), the 20 year average prior was 7% yoy. In Trump’s last year in office, it was nearly 4 trillion higher clocking around 27% yoy.
When you put this kind of wealth into people’s pockets on with assets ascending to an everything bubble, they spend and by spending, it accelerates demand creating the mother of all wealth effects i.e., the everything bubble!”
Diamond has nailed it once again.
Causation and correlation confirmed.
I find it interesting that RE pumpers say there is no housing bubble.
Financial packaging industry say there is no stock price bubble.
Yet what you Diamond has just pointed out are cold hard quantifiable facts that confirm “everything bubble”
#44 cuke and tomato picker on 05.07.22 at 4:37 pm
” has had their feed grain costs soar but the price they get for their chickens remains very low set by the Agriculture Review Board.”
Chicken MINIMUM prices from growers to producers are set by the Chicken marketing board; they do not fix the final price:
http://bcchicken.ca/wp-content/uploads/2022/05/A-176-Mainstream-Pricing-Order.pdf
@#52 Dont Poke the Bear
“don’t poke the bear”
++++
We dont poke northern bears when they wander into our territory.
https://globalnews.ca/news/8803593/gaspe-polar-bear-killing-standard-practice/
“Second, I see inflation peaking soon”
============================
Based on the recent used car sales, Wednesday’s CPI print should come In below 8.2%.
https://www.zerohedge.com/markets/last-two-times-used-car-prices-fell-much-there-was-financial-crisis
44 cuke – good post!
Garage Sales are very big here in Alberta…unlike Ontario which has these civic events on sensible Saturday or Sunday Alberta kranks up the garage sales starting early after lunch on Thursday and continues into Friday and the week-end. The punch line is we were blessed with a pair of counter height black leather stools for our brand new high end open kichen living area. The pair of upholstered chairs a “big total of $8.00” versus Leon’s at $300.00 per
. Also Value Village (senior discount day -20% off) brought us an art piece lamp for a measley $13.00 and a pie shaped night stand for $5.00 and a 17th century Edwardian replica ladies writing desk for $13. This year seems to be a repeat of last year for ladies’ fashion so it looks like I will troll the thrift stores and coool the old credit cards.
#19 Soren. Have you ever thought who built & maintains these Russian yachts? Maybe you should wander down to the Italian coast & have a chat with the thousands of shipwrights & skilled tradesmen that are needed to build one of those white elephants. Do you have any idea what it costs to maintain those ridiculous boats. The luxurious shipbuilding & refit industry in Italy was huge. Poof! Gone, never to return.
#57 Sail Away on 05.07.22 at 7:03 pm
The mandate of the Supreme Court is to uphold the constitution, not follow whims of the populace.
^^^^^^^^^^^
Whim: a sudden desire or change of mind, especially one that is unusual or unexplained.
Roe v Wade which has been in effect since 1973 is a “whim of the populace”? Protecting a woman’s right to decide whether or not she will continue a pregnancy is a “whim”?
“During their respective Senate confirmation hearings after being nominated to the Supreme Court by former President Donald Trump, Gorsuch and Kavanaugh acknowledged the precedent set by Roe, while Barrett told senators she believed the decision was not a “super-precedent.””
https://abcnews.go.com/Politics/trump-appointed-supreme-court-justices-previously-roes-precedent/story?id=84470384
Probably not a whim for SCOTUS either, more like deception and a plot to change the status quo regardless what the majority of Americans want.
#67 Observer on 05.07.22 at 11:05 pm
#57 Sail Away on 05.07.22 at 7:03 pm
The mandate of the Supreme Court is to uphold the constitution, not follow whims of the populace.
———-
Whim: a sudden desire or change of mind, especially one that is unusual or unexplained.
———-
I just decided to read the draft decision on a whim. I’m not actually very interested in the outcome. This way, that way, same-same.
Such a fine, eloquent and comprehensive document is always a pleasure to read.
#60 Quintlian on 05.07.22 at 8:02 pm
#50 Diamond Dog on 05.07.22 at 5:20 pm
To put the power of money control in the hands of the incompetent central bankers who caused the great inflation in first place by idiotic policies is madness.
Repeating for a 1000nd time:
They intend to fight the very fire they created with CPI of 8-10 % with real inflation double that with 1 (currently) -3 % (top!) interest rates…
That robs directly the savers and people on fixed ‘indexed’ income of at least 7-10 % (if you use CPI, if you measure real inflation as in the 80-es – of 15-17 %) from their savings and income in just a single year…
To give the same confused and incompetent individuals a complete control over digital money is a complete madness.
And they demand trust… with all that BS about transitory, peak inflation, ‘neutral rates’ etc.
It seems the general populace becomes increasingly comfortable as it trained so, with it’s fast worsening standard of living and disappearing benefits and devaluated value of past labour (with money serving as deferred consumption – one of the true basic characteristics of money that central ‘bankers’ are failing on).
Do we need to completely revise the current banking model in order to avoid full money control by incompetent charlatans? Because the last feeling I have of their actions is that of a trust and confidence.
Trust is earned, not demanded.
Do I hear 15 % interest rates?
Brian “A lot of economists say that covid isn’t actually considered a recession but a mere temporary blip in the boom cycle since 2009. If true, it would throw all your thoughts out the window.”
It met all the standards of a recession. And from a time/cycle perspective we were due. – Ryan L
mj “I don’t think anyone thought the US would have negative growth in the first quarter. That was before the Fed started increasing rates. The reason the Fed is increasing rates is to slow down demand. So I believe the odds are very high that they go into a recession.”
The rate hikes impact with a lag. If we do experience a recession it would likely be 2023 vs this year. – Ryan L
#67 Observer on 05.07.22 at 11:05 pm
#57 Sail Away on 05.07.22 at 7:03 pm
The opinion reads like reasoning crammed to fit a predetermined and desired moralizing end. That smacks of an activist court that is anything but mindful of the constitution.
They take issue with particular language in Roe that could easily be altered. Instead they are choosing overturning a duly ruled precident that, itself, is a poor precedent to set. Finally, I see some questionable logic in what I read which was only the first few pages.
I look forward to reading the dissenting and also expert opinion of the court. Guessing Sotomayor will write it and be collegial yet excoriating.
One also has to be mindful that part of the lopsided and politicized status of the court is due to the capricious and hypocritical whims of a single senator. This has very little to do with constitutionality.
What is it about authoritarianism and totalitarianism that appeals to you fifth columnists so much? Are you smitten by Tucker Carlson? Are you head over heels in love with Vladimir Putin? I know the Jaguar and Sailo are!
The first of our purpose built was sold. Many kicked the tires and several stepped up. My impressions, developers are burned out in the 416. Parkland dedication, inclusionary zoning , rental replacement and projecting future costs with inflation, higher rates, labor and shifting market sentiment slowed developer interest. Next to location timing is everything.
From my perch, any SFH bought in 2021 in most of southern Ontario is going to suffer if the seller is required to sell in the immediate future. Ridiculous money was paid for 416, 905 and 705 homes in the last year. Surely, the high watermark you would think.
Inflation can by peaking at 9-10% but where does it settle out? That is the big question. What is your view on that?
If there is no recession and total income growth keeps growing at 6-8% annually and inflation settles out at 4-5%, where do interest rates end up?
During the last stagflationary period the economy stayed resilient, but multiples declined to 10X P/E.
@#73 Gravy Train
“What is it about authoritarianism and totalitarianism that appeals to you fifth columnists so much?”
+++
Pointing out the obvious makes a person a “fifth columnist”?
Please.
Those obscenely “phallic” mega yachts were the epitome of greed, excess and unnecessary, boorish consumption.
“I’m a billionaire and I have a 100+ meter yacht that I send all over the world to sleep on once or twice per year……because i can.”
And the rest of the world fawns, bows and scrapes before their billions.
The fact that they were usually built with stolen money seems to escape everyone’s mind.
The skilled trades that design, build and maintain those massively ostentatious, polluting beasts will be forced to work on other obscene polluting beasts like cruise ships that the cattle get to pretend are yachts.
The days of the uber rich with class and humility will die with Warren Buffet and Charlie Munger.
And the fifth columnists will weep.
@#65 Unpinned
“…so it looks like I will troll the thrift stores and coool the old credit cards….”
++++
….And thus the wise people saved money as the economy slowed….
So it begins.
You are at the beginning of the wave of savers that will be forced to cut back on unnecessary expenses due to high food, fuel and housing costs.
12 months?
24 months
48 months?
How long will it take to slay the inflation dragon and the evil recession curse?
Hmmmm
All is not well in Xi land.
https://www.reuters.com/world/china/beijing-covid-outbreak-proves-stubborn-mass-tests-becoming-routine-2022-05-08/
Apparently even the usually compliant citizens of China are getting tired of the endless lockdowns….
A powder keg waiting for an internet video spark?
#76 crowdedelevatorfartz on 05.08.22 at 9:56 am
The days of the uber rich with class and humility will die with Warren Buffet and Charlie Munger.
———
Luckily, Elon is still hale and hearty. Did you see what he did in Ukraine? Flint water system? Remote search and rescue everywhere? Annual charitable donations? Solving world hunger? Saving the rainforest? Free speech?
Just wow.
lessons learned? “Inflated” promises / fake farms / companies
business “fraud” cycle lagging indicator
‘Pandemic, Inc.’ author says financial predators made more than $1 billion off COVID
https://www.npr.org/sections/health-shots/2022/04/12/1091678178/pandemic-inc-j-david-mcswane-covid-fraud
Trump time was a troubling time!”
supply contracts arranged by Peter Navarro,
..”so it began awarding contracts to companies promising to provide them, often at a steep mark-up. J. David McSwane, a ProPublica reporter and author of the new book Pandemic, Inc: Chasing the Capitalists and Thieves Who Got Rich While We Got Sick, says a shocking number of those companies had no experience in providing medical equipment.
https://www.propublica.org/article/contractor-masks-guilty-plea
https://www.justice.gov/usao-edva/pr/former-ceo-sentenced-defrauding-multiple-federal-agencies
https://www.npr.org/sections/health-shots/2022/04/12/1091678178/pandemic-inc-j-david-mcswane-covid-fraud
Jimmy “Inflation can by peaking at 9-10% but where does it settle out? That is the big question. What is your view on that?
If there is no recession and total income growth keeps growing at 6-8% annually and inflation settles out at 4-5%, where do interest rates end up?”
I think longer term (5-7 years) we could see inflation average around 3% which is above our recent experience around 2%. And on rates I see a peak of the Fed Funds rate around 3%. I think all the high debt around the world will help to put a ceiling on rates. – Ryan L
@#72 Faron on 05.08.22 at 1:53 am
Wow, a mature response with differing opinion that does not insult or namecall. Colour me impressed. Imagine if this could keep happening.
How to Cure Inflation?
Diamond Dog at 50 said:
“The cure for inflation, if we haven’t figured it out yet, is to suck somewhere between 2.5 and 3 trillion bucks out of people’s pockets over the next 2 years or so.”
*********************************
And how would that happen? Not by people spending money since that merely puts the money into someone else’s pocket and the money supply is unchanged.
One way is for people and corporations and governments to repay debt. That lowers the total money supply.
Do your part and pay off any debt.
Are there other ways to reduce the money supply?
when quantity takes over quality verify than trust
https://www.reuters.com/world/the-great-reboot/us-rushed-contracts-covid-19-suppliers-with-troubled-plants-2021-12-02/
DELETED (Anti-vaccine. Go away.)
re: Expectations are for a few more 50 bps hikes over the next few meetings and for the Fed Funds Rate to hit 2.75-3% by end of the year. In the inflation chart below I include current consensus expectations for inflation and economists see CPI peaking soon and then declining to 5.7% y/y by end of the year. If this plays out then the Fed is likely to moderate their rate hikes
so we will have a moderated fed rate of say 2% when inflation is still running at 5.7%?
dream on
It’s quite obvious that the narrative has been forgotten, there is too much debt in the system for high rates. I know Garth disagrees with that, but a true deleveraging (borrowers taking their medicine and actually trying to pay back debt with cash flow) has never happened before and won’t this time either. They’ll try it for a 1-2 Qtrs but ultimately it’s not palatable. The only reason we haven’t seen the carnage yet is because so much of the debt is tied to the short end of the curve, and not many refinancing’s have had to happen yet.
#68 Sail Away on 05.07.22 at 11:22 pm
#67 Observer on 05.07.22 at 11:05 pm
#57 Sail Away on 05.07.22 at 7:03 pm
Well, you will certainly find the dissenting opinion equally compelling then Sail Away.
I’m blown away at the junk that is in the Mississippi law. Some egregiously and deliberately misleading statements and biased and charged language. That Alito took it at face-value is very concerning.
One quick example with two almost laughable gaffs: to support the law’s 15week limit, the Miss. law cite legality of abortion in other nations at 20 weeks. Why the 35day (5 week) difference? Because a lower threshold vastly widens the number of nations allowing the procedure.
Second gaff is in relying on the law of other nations to guide law in the US. Last I checked Mississippi is in the US and should set law with only its populace, and the two guiding constitutions. Some nations permit violent punishment for crimes that are misdemeanors in the US. Can we assume Mississippi may then use those laws as justification for something equally draconian?
That Alito would allow those gaffs into his decision is a clumsy embarrassment. And I haven’t even reached the 20th page.
The dissenters and SCOTUS scholars are going to have a field day with this.
#76 fartz
YUP
#64 Dr V on 05.07.22 at 9:07 pm
44 cuke – good post!
Yes chicked feeds up 100% in a year.
My buddy sells privately in black creek gov inspected facility. Best chicken I’ve ever had.
Buy at the farm cut out the middle man.
Best eggs too $5.
#69 Summertime on 05.08.22 at 1:30 am
“To give the same confused and incompetent individuals a complete control over digital money is a complete madness.”
Yes, it’s quite sickening.
But they are not confused and incompetent; they are deliberate and cunning.
It is no accident that the rich have amassed incredible wealth with the suppression of the cost of money.
Of course, some of the excess flowed to the working class, creating an all too easily embraced and welcoming illusion of prosperity.
And while they told us that inflation was transitory, the reality is that the illusion of prosperity of the middle and working class is what is transitory.
Prices of the assets of the working class will deflate.
The debt won’t.
#83 Shawn on 05.08.22 at 10:49 am
“Are there other ways to reduce the money supply?”
Quite simple….
Central bank can:
-Increase interest rates (moral suasion in Canada)
-Increase the reserve the banks have to hold.
-Stay out of market operations and don’t by junk bonds at premium prices.
Recession may be what we need. After a wild party a bad hangover should be expected. Otherwise we will party ourselves into a depression.
@#79 Sailio
“Luckily, Elon is still hale and hearty.”
+++
There’s a lot of adjectives I would use to describe Elon ….but “humble” isn’t one of them….
“Hubristic’? Perhaps.
“Humble”? Never.
#5 crowdedelevatorfartz on 05.07.22 at 10:35 am
“I also find it somewhat ironic that our “Minister of Families” is encouraging (thousands? millions?) of US women to come to Canada for an “abortion.””
Yeah that was a good example of our government putting left wing virtue signalling ahead of protecting our health care system from overwhelming demand. The whole purpose of the lock downs was to flatten the curve so our health care system could cope with access demand. Now the Liberals tell Americans seeking abortions to come on over and fill up our hospitals and clinics before they have worked through the COVID19 backlog for “non emergency surgery”. “Non emergency” meaning stuff that keeps you in pain but probably won’t kill you.
IF men needed abortions, there would be one on every corner, like 7-11s. There would be no debate.
imho
#91 Quintilian on 05.08.22 at 12:18 pm
Over the past decade anyone who was clever enough to read the room, strategize, and use easy monetary policy to their advantage has made money. That includes everyday joes and janes who suddenly had access to leverage in real estate and who have seen massive windfalls. Ditto the stock market.
Aside from the warped ideological angle of your post, because you didn’t read the room doesn’t mean the system is out to get you, and is “cunning”. It simply means you didn’t take advantage of the opportunity when it arose.
IDK
92 Q
“Central bank can:
-Increase interest rates (moral suasion in Canada)
-Increase the reserve the banks have to hold.
-Stay out of market operations and don’t by junk bonds at premium prices.”
————————————————–
I’m sure Shawn will have a reply for you, but I dont think those measures decrease the money supply. They
just lower or stop the increase.
Shawn’s suggested de-leveraging should actually decrease it.
The Russkies are not out of control. The US deep state has gone insane. Like a dying animal taking it’s last breath it is lashing out trying to start WWIII.
America started the special military operation and is losing along with the EU in more ways than one.
Just wait until the EAEU finished he new gold and vommodity based currency the east I’d going to use and totally disregard the USD.
It’s over for you guys lol. And you deserve it. Puton jas a PhD on economics, did you forget that?
Za pobyedu !!
Made it to 100 comments!