Timing these things is so difficult. In economics, things take longer to happen than you think they will and then they happen faster than you thought they could. Could this whole house of cards come crashing down before Oct 1? It is a distinct possibility. All the signs are there. Will it? From today's look at the 30y-3mo curve, which hasn't inverted yet, there appears to be some time still until the worse hits the market. At its current pace, it will be less than two weeks until the curve inverts but then the average time to recession after the 1st inversion is 456 days. That would be November of '23.
From what I read of the US general news, the population is still of the thinking that prices are going up and are reducing spending to compensate, having not arrived at the dollar being devalued point.
Also I think real GDP -has- been damaged.
I also wonder if the historically low velocity of money in the US will stay.
Also this decline in the money supply is not any actual reduction given the massive inflation beforehand, aside from probably only beginning to kick in two years hence.
So what I think is that although the Fed may have to ease as the economy goes into recession, the inflation is still going to be there over the next two years. So what seems most likely is stagflation, as opposed to a deflationary recession, which would only trigger additional government spending in any case.
+1 for the Janet Yellen skewering
Would you reckon that a stock market crash is more likely to happen _before_ or _after_ October 1 of this year?
Timing these things is so difficult. In economics, things take longer to happen than you think they will and then they happen faster than you thought they could. Could this whole house of cards come crashing down before Oct 1? It is a distinct possibility. All the signs are there. Will it? From today's look at the 30y-3mo curve, which hasn't inverted yet, there appears to be some time still until the worse hits the market. At its current pace, it will be less than two weeks until the curve inverts but then the average time to recession after the 1st inversion is 456 days. That would be November of '23.
From what I read of the US general news, the population is still of the thinking that prices are going up and are reducing spending to compensate, having not arrived at the dollar being devalued point.
Also I think real GDP -has- been damaged.
I also wonder if the historically low velocity of money in the US will stay.
Also this decline in the money supply is not any actual reduction given the massive inflation beforehand, aside from probably only beginning to kick in two years hence.
So what I think is that although the Fed may have to ease as the economy goes into recession, the inflation is still going to be there over the next two years. So what seems most likely is stagflation, as opposed to a deflationary recession, which would only trigger additional government spending in any case.