Yep they are slowly but surely trying to tinker their way through economic slowdown and emerging deflation, likely at some point they will start applying intensive care.
Curiously the number of charts in that edition experienced inflation from 10 to 12, and then deflation this year from 12 to 10 !!!! (an unintentional nod to the macro outlooks!)
If 10yr yields move below 2% and the market is pricing in FED funds above 4%, how long can the economy sustain such a deep inversion of the yield curve?
Do you think the chances of the economy falling off a cliff into a recession or the “soft landing” that we might see if incoming economic data continues to come in favorable is more likely?
Well, all the leading indicators point to recession (and we have to listen to what the data is telling us), so it's basically up to some sort of surprise or external shock or unexpected strength/resilience to prevent that recession prognosis at this point...
“Unflation” is a better term than “disinflation.”
lol, thanks!
😄
China's (self) injuries just needs some first aid. I'm betting bandages are on the way.
Yep they are slowly but surely trying to tinker their way through economic slowdown and emerging deflation, likely at some point they will start applying intensive care.
In case you missed it, since some have asked, here is the same article from last year: https://www.topdowncharts.com/post/the-12-charts-to-watch-in-2022
And the Q4 update from late last year: https://topdowncharts.substack.com/p/the-12-charts-to-watch-in-2022-q4
Curiously the number of charts in that edition experienced inflation from 10 to 12, and then deflation this year from 12 to 10 !!!! (an unintentional nod to the macro outlooks!)
If 10yr yields move below 2% and the market is pricing in FED funds above 4%, how long can the economy sustain such a deep inversion of the yield curve?
That's the point -- the only way the 10-year gets to 2% is via recession
Do you think the chances of the economy falling off a cliff into a recession or the “soft landing” that we might see if incoming economic data continues to come in favorable is more likely?
Well, all the leading indicators point to recession (and we have to listen to what the data is telling us), so it's basically up to some sort of surprise or external shock or unexpected strength/resilience to prevent that recession prognosis at this point...