For Monday night
notes plus the link for paid subscribers (the link is after the notes)
More notes on the recession that isn’t (yet).
The effects of rising rates have yet to really start impacting things. It’s not that the economy is strong so much as it just takes a long time for these things to play out. The current period of seemingly little impact has created a false sense of confidence
…this phenomenon of a long lag between interest rate hikes and the start of a recession has occurred in every recession going all the way back to 1954, the start of Federal Reserve data. And importantly there’s been a similar lag in each period between reaching the peak interest rate, the start of the recession, and the bottom of the stock market.
In other words, despite the oft-repeated refrain from many pundits, the stock market is in fact a lagging — NOT a leading — indicator of recessions.
Pointer from Moses Sternstein. Turning points are hard to spot, much less predict.
Just three years of a post-Covid economy have managed to reverse one fourth of the increase in wage inequality since Ronald Reagan first took office — at least, by one common measure.
He cites a paper by David Autor and others.