Our Thoughts
Recession Still on the table?
If the consumer is hurt, they spend less. When consumers spend less, the economy weakens and businesses reduce their capital expenditures leading to layoffs and spending cuts. Former New York Fed president, Bill Dudley, refers to this as a “feedback loop”.
Operation Break Stuff?
Take a look at the FHFA House Price Index from Q3 2022 (Q4 out in January). According to Nataliya Polkovnichenko, the Supervisory Economist for the FHFA, “House price gains have substantially disintegrated in the 3rd quarter with a pace comparable to the one we observed during the great recession”.
Red October?
As I am sure you are aware, rising interest rates, the extremely quick rise of the US dollar (see chart), and inflation are all trending headline topics currently.
All three are connected and even worse, they are playing a big role in pushing the WORLD into recession.