Financial Times (September 1)
“The US labour market cooled in August, raising hopes that the Federal Reserve is successfully orchestrating a soft landing for the world’s largest economy. Investors hailed a possible Goldilocks scenario in which inflation comes under control without causing a recession, as Friday’s figures revealed an uptick in the unemployment rate, subdued jobs growth and wage rises back at pre-Covid rates.”
Tags: August, Cooled, Fed, Goldilocks scenario, Hopes, Inflation, Investors, Jobs growth, Recession, Soft landing, U.S., Unemployment, Wage rises
The Economist (July 22)
“Economists are not known for their optimism, but today their good cheer is palpable. Not long ago it seemed that an American recession was inevitable.” Now, expectations are heady that this can be averted, but “the surge of hope is… unusual because the world economy is slowing down.” While “falling inflation is good news,” it remains “too early to hail a ‘soft landing.’”
Tags: Averted, Economists, Expectations, Hope, Inevitable, Inflation, Optimism, Recession, Slowing, Surge, U.S., World economy
Wall Street Journal (July 15)
“China became the largest auto exporter in the world in the first quarter, yet the economy is ailing by many measures.” Its “economy might look good on paper, but it feels like a recession” and “many say conditions in world’s No. 2 economy are grim.”
Tags: Ailing, Auto exporter, China, Conditions, Economy, Grim, Q1, Recession, World
Investment Week (June 12)
“Earlier this month, US Federal Reserve Chairman Jerome Powell said he does not expect inflation to decline quickly, signalling resistance against the market consensus. We believe it would have to be a severe economic recession for the Fed to begin cutting interest rates before the end of the year, as is currently priced in by the forward markets. Therefore, we believe, interest rates will remain ‘higher for longer’. This is inherently positive for MMFs, where yields and total returns are driven for the most part by central bank rates. A higher-for-longer interest rate trajectory could potentially yield 4.5% to 5% for MMFs in US-dollar terms in the next three, six and 12 months.”
Tags: 4.5% to 5%, Consensus, Fed, Forward markets, Higher for longer, Inflation, Interest rates, MMFs, Powell, Recession, Resistance, Total returns, U.S., Yields
Financial Times (April 28)
“Deprived of investment opportunities abroad, Russians have piled their savings into the likes of Lukoil, Gazprom and Sberbank, which combined account for about 40 per cent of the stock market’s total value.” Marking a rebound, “Russia’s stock market has climbed to its highest level in more than a year as domestic retail investors with nowhere else to go snap up the dividend-paying stocks that sold off heavily following the invasion of Ukraine”.
Tags: 2022, Banking crisis, Bracing, Economy, Fears, Growth, Interest rates, Q1, Q4, Recession, Slowdown, U.S., Wall Street, Wobbled
New York Times (March 21)
“The failures of Silicon Valley Bank and three other lenders over the past 11 days” have “put the Fed in a difficult position as it prepares to deliver on Wednesday one of the most consequential decisions on interest rates of the Jay Powell era.” In addition to tightening rates to curb inflation while somehow avoiding a recession, the “banking crisis hands the central bank a third crucial challenge: how to steer the banking sector out of the predicament and restore confidence in the sector.”
Tags: Banking crisis, Consequential, Decisions, Failures, Fed, Inflation, Interest rates, Powell, Predicament, Recession, SVB
New York Times (March 8)
“It seems even the most bullish on Wall Street now get the message: The Federal Reserve is prepared to raise interest rates until it feels it’s sufficiently beaten back inflation — even if those moves cool off the job market and send the economy into recession.” It will now clearly be “higher for longer.”
Tags: Bullish, Economy, Fed, Higher for longer, Inflation, Interest rates, Job market, Recession, Wall Street
The Guardian (February 5)
“It is finally dawning on more and more people that leaving the EU was a colossal mistake.” Brexit has led to “supply chain disruptions, staffing shortages, higher food prices and extra red tape for business. Public opinion is shifting towards remorse. Instead of hurtling away from the EU into the swaggering prosperity promised by the Leave campaign, Britain is instead receding into a dark timeline of recession, strikes, and political instability. Last week, it was forecast that Britain will be the only G7 economy to shrink in 2023.”
Tags: Brexit, Disruptions, EU, Food prices, G7 economy, Mistake, Political instability, Public opinion, Recession, Red tape, Remorse, Shortages, Shrink, Staffing, Strikes, Supply chain
Bloomberg (January 21)
“In a week marked by fresh recession angst from Wall Street to Davos, JPMorgan Chase & Co. finds the odds of an economic downturn priced into financial markets have actually fallen sharply from their 2022 highs.” In October, “a contraction was effectively seen as a done deal across markets.” Now, “according to the firm’s trading model, seven of nine asset classes from high-grade bonds to European stocks now show less than a 50% chance of a recession. That’s a big reversal.”
Tags: Angst, Asset classes, Bonds, Contraction, Davos, Economic downturn, Financial markets, JPMorgan Chase, Recession, Stocks, Trading model, Wall Street
Wall Street Journal (January 15)
“Despite signs that inflation has started to recede, economists still expect higher interest rates to push the U.S. economy into a recession in the coming year…. On average, business and academic economists polled by the Journal put the probability of a recession in the next 12 months at 61%, little changed from 63% in October’s survey.”
Tags: Academic, Business, Economists, Economy, Inflation, Interest rates, Recede, Recession, Survey, U.S.
