From Reuters:
Fed staff drop US recession forecast, Powell says
U.S. Federal Reserve Chair Jerome Powell said on Wednesday the central bank’s staff no longer forecasts a U.S. recession, and “we do have a shot” for inflation to return to target without high levels of job losses.
Powell told a news conference after the Fed’s latest interest-rate hike that there was “a lot left to go to” see such a soft landing.
“So the staff now has a noticeable slowdown in growth starting later this year in the forecast, but given the resilience of the economy recently, they are no longer forecasting a recession,” he said.
Fed staff last November introduced the notion that a recession might be “almost as likely” as their baseline outlook at the time for below-trend growth, minutes of Fed meetings show. In March, on the heels of the banking sector upheaval that had just been triggered by the collapse of Silicon Valley Bank earlier that month, they shifted to outright forecasting “a mild recession” later this year.
The shift by staff to a less pessimistic baseline outcome for the economy dovetails with outlook upgrades by a number of private-sector economists in recent weeks who have done the same in acknowledgment of the economy’s resilience in the face of Fed 5.25 percentage points of rate increases since March 2022.
first
Phirst.
Second!
Just like the weather, the Economy is sizzling hot!
Dark Brandon rules
Market cracks me up. They think Fed ending rates is bullish. It’s f’ing deflationary you maniacs. Going to end badly if they keep driving this up. Game of musical chairs now…last one holding is dead.
And I am not saying it is going down now…just saying it’s going into frothy area and no one cares. Lining up like lemmings to buy. It’s amazing to witness over and over again.
Boomer, from late last night’s ChiFi is a lifetime renter if I recall correctly.
Hey Pumps,
Pancake man is paying you a dividend from his Bitcoin mining operation.
$0.000002 per share!
Don’t spend it all in one place.
The FED can’t fight the inflation fire. It’s like a Canadian forest inferno. They’re tossing out ‘what-is’ and ‘maybes’ like a 15 year old girl wondering if her painted nails are the right color. Gas is back up again and nobody talks about it because like everything else, the muppets become desensitized and obedient. The cost of everything is a runaway train. I was never into shiny, even as a hedge but I wouldn’t be shocked if it doubled within the next two years. $800,000 for a one bath split in Westwood? A town that is a nice mix of blue and white color? Insane. Americans are at $1 Trillion dollars in credit card debt with rising rates and no end in sight.
Yup. Economy would crack if majority were paying current car loan rates and home rates. Aka only a matter of time…when those cars and homes start to break.
“Why is the economy so resilient? One reason: A large swath of the economy has locked in low rates for longer. The Bloomberg MBS index still has an average coupon of under 3%. Family mortgages totaling $13.5 trillion are mostly immune to the Fed’s rate increases.”
Fast: It’s the new world, or it’s different this time, take your pick. Meanwhile, as you note, and I have noted, credit card debt at an all time high, car repos are increasing, and AI is here to stay. Party on!!
Fed can’t really fight inflation directly, they can effect money supply and credit expansion. But they weren’t in charge of the money lent/sent to people & businesses for “Covid relief”. I wonder if the return of student loan interest payments coming later this year will hit hard. Or at least hit the Starbucks and avocado toast and Netflix demand.
I saw this from an analyst a couple months ago:
Student Debt: Millennials Most Exposed
After three years of extensions, the pause in student debt payments is finally set to expire late this summer. Student loans total $1.7 trillion, equating to a tenth of total consumer spending. The annual savings from the moratorium were (30) to (35) basis points of spending, two-thirds of a month of growth over the last twelve months, and close to one month using the longer-term average rate. That could be material if it coincides with a meaningful slowdown in job gains. It’s possible that the rise in payments will be lower than what the estimates suggest, if new income-based repayment options, more generous and sweeping than what came before, are put in place. Prior to the pause more than half of balances were enrolled in similarly-structured plans. Our best guess is that they won’t be in wide use by this summer, but could shave up to (20)% off total payments, reducing the hit by 5 basis points of spending.
The end of the holiday will be felt most by 25-to-34 year olds. Student loan balances are disproportionately owed by that demographic, and the drag on their spending from payments reemerging may be in the (65) to (85) basis point range. The liquidity created by the payment pause likely generated a greater than 1:1 impact on spending for them, so it’s reasonable to think that any squeeze will be slightly larger than the direct increase in payments. There are other forces at work too, including inflation, oil prices, interest rates and wealth effects. Putting it all together, the total drag for 25-to-34 year olds looks to be around (2)% of spending this year, compared to (4)% in 2022. The corresponding numbers for all consumers are zero and (5.5)%. Non-mortgage delinquency rates have already begun to rise for the young, suggesting some vulnerability.
$32 Trillion dollars in debt and the vegetable and stupid bastards on the left are talking about student loan forgiveness and reparations while they’re taking bribes from foreign enemies for influence. This is insanity.
Lawrence Yun NAR says housing recession is over!!
I’d rather have student loan forgiveness vs money to Ukraine.
Help your own family first.
Nj no sales tax on electric cars. This is a gift to someone. Or boomers that get tax breaks on their homes.
When the state doesn’t collect from these individuals, you don’t really believe that they don’t need the money.
They just increase the amount they take from those who drive gas cars, and those homeowners and renters who aren’t senior citizens, then balance the budget with it.
Electric cars. Some states are alternating with brown outs because capacity is at max and the m0rons on the left are pushing electric cars, appliances, lawn equipment, bicycles and anything else that isn’t nailed down. Fucking idiots.
“I went from 90% cash in Jan of 2021 to 0% cash last year and now back to about 20% cash today. Valuations are extreme everywhere I look. Only biotech is cheap. Its the end of July, and I am now super bearish based on overall market value. It been a great year so far with big runs in my tech and biotech portfolios. Bio up about 20% and tech up about 40%. Now its time to hunker down and wait for the bubble to pop in the overall market.”
Funny. I’m nearly all in!
Lawrence Yun NAR says housing recession is over!!
Best and final by EOD. Unless you’re willing to offer 125% of my asking price, don’t insult me. I demand top dollar! Can’t afford it? May I suggest looking in the Muncy, PA region?
He needs to post source rather than just anonymous snippets as so many have said.
As I posted yesterday I’m managing very cheap SPX positions for a downside surprise. At my stop losses won’t hurt me if they get there (longs > these) but downside levered protection may actually have me net positive in the event of a 2% or more drawdown.
Meaningful resistance level right now on spx/spy back to early 2022. Not thrilled today opened and is higher than the 7/19, 25, 26 highs. We’ll see where she goes.
Phoenix says:
July 27, 2023 at 11:20 am
I’d rather have student loan forgiveness vs money to Ukraine.
Joe Biden has given Ukraine 43 BILLION dollars in aid, what do you think he is hiding??? Now he is going against the supreme court and is giving loan forgiveness to students, yet does nothing about the skyrocketing college costs.
Now electric cars are not selling well, because people cannot afford them. He probably will raise the subsidies from the middle class again.
Yet he refuses to do anything about the Fentanyl killing 10,000 Americans a month. Who is this president representing ? Besides his own gains. He is kissing China’s butt, and China is telling him “mind your own business”. Joe Biden is too old to be our next president.
Fast : Or perhaps St. Lawrence Co. NY.
Stop it. Nobody is getting reparations even though blacks didn’t have any rights in this country until the 1960’s
Fast Eddie says:
July 27, 2023 at 10:52 am
$32 Trillion dollars in debt and the vegetable and stupid bastards on the left are talking about student loan forgiveness and reparations while they’re taking bribes from foreign enemies for influence. This is insanity.
Great Parody post.
https://twitter.com/Cokedupoptions/status/1684286751341154305
I bought this house for $800k with a 9% mortgage
When rates go down, it will be worth $1.6 million and I can refinance at 2%
Real estate investing is too easy
You can keep repeating this lie, but it doesn’t make it true.
There were many injustices and rights violations, particularly in some regions, but a statement like this is just flatly wrong. Almost as dumb as the BLM types saying that the US dropped the atomic bomb on Japan because white people spent so much money on it.
“blacks didn’t have any rights in this country until the 1960’s”
Very Stable Genius says:
July 27, 2023 at 12:51 pm
Stop it. Nobody is getting reparations even though blacks didn’t have any rights in this country.
Reparations have already started, I am not good on links but you can google it.
https://corporateaccountability.org/blog/local-reparations-initiatives/?gclid=EAIaIQobChMIiuafsMuvgAMVjUhHAR28xwSXEAAYASAAEgJgz_D_BwE
I don’t know if the two events are connected but with the proposed gas appliance restrictions in New Jersey…I’ve seen elizabethtown gas digging like crazy literally night and day laying down new natural gas main lines in areas the previously did not have it.
https://apnews.com/article/clean-energy-gas-stoves-electric-new-jersey-befcaae4ed716fec045f66b236d47d4c
“Another significant selloff in Treasuries today, which are now on the verge of a breakdown from support.
The chart below is a reminder of the unsustainable divergence between rising yields and the historically inflated valuations of today’s equity markets.
In my view, Today’s reversal on Nasdaq was an important indication that this disconnection between Treasuries and overall stocks is about to become relevant again, particularly megacap tech stocks.
Keep in mind that all of this is unfolding while the US government has already issued nearly $1.2 trillion dollars of debt in less than two months with an ongoing twin deficit of 12% relative to GDP.
These forces should continue to exert pressure on yields, leading them higher.”
“It’s interesting that this is the first real challenge of that 4% marker on the 10 year *after* the huge post debt ceiling debt issuance. The debt is being piled on, with no end in sight, making another sustained return below 4% for the 10 year yield difficult to picture.”
Cocoa Futures have surged to their highest price in more than 12 years
https://twitter.com/barchart/status/1684399316914294786?s=46&t=0eaRjeKWHSIY8WCyPT4KMg
Looks like second wave of inflation with energy being main driver.
Nah. Gas always goes up as we approach Labor Day/Memorial Day. Our red hot economy is not helping things either.