Originally Posted by vtec to vvel

https://www.cnn.com/2023/04/18/econo...ion/index.html

"Jobs are strong, inflation is cooling — yet recession worries remain"

Historically, each time the Feds have tried to fight inflation, a recession has always followed. Given the current Fed Chair is using an old/outdated/non-relevant playbook, I'd say the chances of a recession is way more likely than not. I 100% believe that fighting inflation is a balancing act - too much or too little of something at the wrong timing can lead to catastrophic results.

Think of a sink faucet. If you need water and turn on the faucet, you only use what you need and turn off. Otherwise, you risk overflowing issues and a high water bill. During COVID, the Feds left the water running for too long, and rather than gradually turning it off, they abruptly shut it off in the form of much higher bps rate increases at increased frequencies. Now, when you are trying to wash your hands, you are only getting drips of water at a time rather than it free-flowing, which is a reflection of quantitative tightening in the economy. If only allowing drips to come through, you are never going to accomplish washing your hands, which would reflect production reduction and cause the economy to go into a recession.

“In the optimist camp is Treasury Secretary Janet Yellen, who told CNN’s Fareed Zakaria last week a damaging recession can be averted. ‘I think what people call a soft landing is possible,’ she said. ‘I do think there is a path to bring down inflation while maintaining what I think all of us would regard as a strong labor market.’

Once again, no b!tch, the “soft landing” ship as sailed away long ago.

“Economists at Goldman Sachs are forecasting only a 35% chance of recession, noting ‘rebalancing of supply and demand is on track.’”

LMAO! Are they totally oblivious to what is going on in the world? How is an upcoming recession only at a 35% chance? A recession is way more likely than not. And supply re-balancing and on track? No, we have quite a ways to go on this. Also, the war in Ukraine is a huge factor on global supply.