How does this decline compare to previous recessionary ones?

[target2019]

Two thoughts.

1) I think of these times as "We're still in an economic cycle that includes the COVID stock curve." After a jolt like that the shock wave continues.

2) Do you prefer higher equity balances or higher interest rates?

3) As freedom2022 points out, it's time to pay the price for -0- interest rates.

 

[Koolau]

Two thoughts.



3) As freedom2022 points out, it's time to pay the price for -0- interest rates.

Yeah, I think it's better to get the pain over with as quickly as possible. And yes, the "Covid effect" is still with us. Covid has changed a lot in the USA and the world - sort of like 9/11 changed a lot, Covid will forever leave its imprint on us.

 

[Brat]

This stock market downturn is driven by interest rates. Based on predictions of Peter Ziehan we will have high inflation as we go through reshoring manufacturing. This inflation is not demand driven (how much people are spending), it really has to do with the availablilty of capital as we reorient our economy.

IMHO the Federal Reserve is beating the wrong horse.

 

[Montecfo]

So you're saying that the Fed is bent on making a recession happen? That's crazy. Why would the Fed want to do that?

What the Fed is bent on is breaking inflation, and if a mild recession is required to break inflation then so be it.

To achieve price stability.

Powell recently said a so-called soft landing is plausible but not a baseline expectation. And said he is not willing to give up on price stability to achieve a soft landing.

He is far from plain spoken but I do not find this difficult to parse.

 

[pjigar]

So you're saying that the Fed is bent on making a recession happen? That's crazy. Why would the Fed want to do that?

What the Fed is bent on is breaking inflation, and if a mild recession is required to break inflation then so be it.

I am sure you are aware of "Dual Mandate". Market performance, Economic activity (GDP), etc. are not direct mandates of Fed although they are related to unemployment rate and inflation.

 

[Gumby]

To achieve price stability.

Powell recently said a so-called soft landing is plausible but not a baseline expectation. And said he is not willing to give up on price stability to achieve a soft landing.

He is far from plain spoken but I do not find this difficult to parse.

It may just be a matter of semantics. The Fed has its dual mandate, and it will take steps to fulfill that mandate. If those steps cause a recession -- c'est la vie. But it would be wrong to say that the Fed is deliberately trying to cause a recession.

 

[Montecfo]

It may just be a matter of semantics. The Fed has its dual mandate, and it will take steps to fulfill that mandate. If those steps cause a recession -- c'est la vie. But it would be wrong to say that the Fed is deliberately trying to cause a recession.

You can't prioritize fighting inflation and stimulating the economy to grow jobs at the same time. You have to choose.

Right now he is an inflation fighter which is exactly what he is telling us. Core PCE at 2.4% for Q3 yet the Fed consensus is another rate hike this year.

Soft landing not the base case says recession is the expected case.