LimmerMan, not all inverted yield curves result in recessions
but when the Fed is asleep at the wheel, recessions follow
in the past, the Fed has raised a final time exactly when they needed to cut
they got faked out by dismantled engines, slow layoffs
I doubt that happens this time
the Fed knows all about that fake
but the Fed might WANT a flat quarter, as in 1.5-2.5% GDP
trouble is, they overshoot consistently
then their obsession for seeing inflation interferes
they saw higher energy costs as inflationary, WRONG
slightly inflationary for consumers, but hugely recessionary for corporate profits
Rivlin thinks we get 2% GDP in Q1
I think she has a good grip of Greeny's goal
I think the Fed will overshoot
heck, we got 2.4% GDP in Q3 just recently
on the other hand, when Clorox warns, FedEx warns
the Fed MUST hear that, and respond
the faster they respond, the less likely a recession
the key factor most people overlook is:
when Fed begins to cut rates, InfoTech planners within corporations DONT cancel their springtime orders
I think that was behind Greeny's statement two weeks ago
but anyone who thinks Greeny intends to bail out the stock market is simply dreaming
/ jim |
