Attention Economy


Friday, February 10, 2023

The Recession Debate Gets Interesting

What Recession? Some Economists See Chances of a Growth Rebound.
https://www.nytimes.com/2023/02/09/business/economy/fed-economy-recession-rebound.html

Forget Hard or Soft Landing: Meet the Rolling Recession
https://www.bloomberg.com/news/articles/2023-02-09/what-is-a-rolling-recession-us-could-escape-economic-pain
Mild slumps that ripple through the economy can slow inflation without putting too many people out of work.

 
My take:
Are markets right in expecting an ‘immaculate disinflation’? BY VIVEKANAND JAYAKUMAR - 02/06/23
https://thehill.com/opinion/finance/3844349-are-markets-right-in-expecting-an-immaculate-disinflation/   
All in all, it appears that both the stock and the bond markets may be getting ahead of themselves by assuming that the worst is over. Far too much is now riding on expectations for an early Fed pivot. Some analysts have also argued that stock investors may be ignoring negative operating leverage and a possible squeeze on profit margins.
Given the ongoing uncertainty about the future pace of disinflation, and potential risks involving premature easing of financial conditions and stickiness in services inflation, it may be in the interest of market participants to avoid excessive exuberance.

It is too early to claim victory in the inflation battle or even to rule out a resurgence in underlying inflationary pressures — that was one of the key takeaways from the experience of the 1970s.