Roscoe, the red dog on the left has been going berserk for the last half an hour. Either we have a coyote near by or he can't believe that Brian Wesbury spun the jobs number as exceeding the natural growth rate of the population.I do think today's report offers something for the soft landing crowd which is a positive.
The trouble I have with betting on a soft landing is how infrequently it happens.
I have written a few times about not betting on the worst case scenario as playing out because, in part worst case happens so rarely. By the same token, the best case scenario does not happen very often either.
Usually the result is somewhere in between worst and best with a nod to how markets usually work. We usually have a recession every few years. The recession usually comes as a function of the Fed going to far. It take six-12 months for rate hikes to be felt so the June hike is still a minimum of three months away from having its full effect.
Inverted yield curves, and we are no longer talking about a 5 beep inversion, leads to recession 83% of the time. This does not have to be a 1930's or 1970's event but economic cycles have not been repealed.
This is just how things work. This time being different is not impossible but it is unlikely.
1 comments:
yes we definately have an inversion now, but do not get to negative.
The fed has gotten much better. rate hikes are kept to 0.25%, they did not go to far, They were clear about all 17 rate hikes.
Predictiona are very difficult, but soft landing or very mild recession seem most probable. And as long as I'm going out on a limb S&P 500 finishes the year over 1400.
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