NB: Although Biden and the Democrats will be blamed for the evidently
coming recession (globally, not just USA), the reality is that it was
caused by Putin and Putin's candidate, Trump (Putin aggressively meddled
in the 2016 USA election). Given the actions of Putin to invade Ukraine
(supported in this Sudetenland-like aggression by Trumpites such as
Tucker Carlson) along with anthropogenic global warming (Trump
"weather") and the COVID pandemic (Trump "sniffles"), bad economic
consequences followed.
https://news.yahoo.com/top-economist-david-rosenberg-predicts-104129283.html
Business Insider
Top economist David Rosenberg predicts US inflation will plummet below
3% next year - and warns the Fed's rate hikes are courting disaster
309
Theron Mohamed
Thu, October 13, 2022 at 3:41 AM
The Fed is fighting inflation too hard as price pressures are
fading, David Rosenberg said.
The central bank's rapid interest-rate hikes are paving the way for
an economic disaster, he said.
The Rosenberg Research chief expects inflation to drop from over 8%
to below 3% in the next year.
The Federal Reserve seems intent on choking the US economy into
submission, despite mounting evidence that the inflation threat is
fading, David Rosenberg said in a pair of appearances this week.
The Rosenberg Research founder noted the Fed is rapidly hiking interest
rates and shrinking its balance sheet, even though stocks are in a bear
market and the macroeconomic outlook is deeply unclear. At the same
time, the yield curve is inverted — a reliable sign of an upcoming
recession.
"We have an economic storm brewing," he told BNN Bloomberg on Tuesday.
"2023 is going to be a very, very rough year."
Rosenberg warned that if the Fed keeps tightening its monetary policy,
it could tank house prices and spark a credit crunch in the banking
sector. It could also weaken consumer confidence and spending, and
prolong the economic downturn.
The leading economist explained why he sees less upward pressure on
prices in a video uploaded to his firm's YouTube channel on Wednesday.
He noted that delays in vendor deliveries have returned to pre-COVID
levels, commodity prices have slumped into a bear market and freight
rates have declined sharply. Meanwhile, the US labor market appears to
be softening for young people, working mothers, and other key groups.
"Our models show headline inflation slicing below 3% in the next 12
months, from over 8% today," Rosenberg said. "But by then it's going to
be too late to save the economy, and I would posit that the Fed has
already done the overkill as is."
He suggested the Fed has a "once burnt, twice shy mentality" after
reacting too slowly to the inflation threat, and may have overcorrected
as a result.
Moreover, he said the central bank might be trying to cool demand
whether or not there's inflation, given its apparent disregard for the
gloomy US economic outlook, the surging dollar, and lower commodity prices.
"This really can't be about inflation in a traditional sense," he said.
"It has to be a case of taking the punch bowl away."
Notably, Rosenberg warned investors not to expect stocks to rebound
instantly once the Fed starts easing its policies again.
"For everybody that's thinking about the pivot, first comes the pause,
and historically the stock market bottoms — believe it or not — 16
months after the Fed pauses," he said.
"The real thing happens deep into the easing cycle, and that's probably
a story for late next year or into 2024."
AND (to explain the "yield curve" in the above item):
https://markets.businessinsider.com/news/bonds/recession-outlook-yield-curve-inversion-signals-steep-downturn-inflation-news-2022-9
A part of the Treasury yield curve has just seen its steepest inversion
since 2000 as bond markets flash recession warnings
Brian Evans
Sep 15, 2022, 8:10 AM
An inverted yield curve typically means investors expect a recession.
Getty Images
The two-year Treasury yield blew past the 30-year yield Thursday as
inflation data causes a further inversion.
The spread between the two bonds marks the steepest inversion in
nearly 22 years.
An inverted yield curve has historically been a reliable indicator
of a coming recession.
The yield on the two-year Treasury bond pushed further past the 30-year
yield to mark the deepest inversion between the two notes in 22 years on
Thursday, as fresh inflation data, bets on rate hikes, and recession
fears widen the gap.
The two-year yield on Thursday jumped six basis points, to 3.85%. That's
38 basis points above the 30-year Treasury yield of about 3.47%, and is
the most inverted the two bonds have been since 2000. The yield on the
two-year note surged Tuesday following August inflation data that showed
price increases slowed, but not as much as markets had hoped for.
An inverted yield curve is a closely watched indicator of a potential
recession in the near- to medium-term. The inversion essentially flips
conventional thinking that long term debt carries more risk than
short-term obligations. The current difference between the two-year and
30-year yields is the widest gap among US benchmark rates.
The Federal Reserve is expected to take strong steps to address
inflation at its next policy meeting, with Wall Street widely expecting
a 75 basis point hike following this week's release of August inflation
data. Some have said the central bank could push rates as high as 9% to
truly tame inflation.
"A deepening of the yield curve perfectly reflects all the doom and
gloom that is spreading across Wall Street. It appears that inflation is
proving to be more troubling than many thought and the risk of a severe
recession is growing," said Edward Moya, senior Market analyst at OANDA.
"Traders are now expecting much aggressive tightening by the Fed, and
that is the latest catalyst for the widening of the yield curve
inversion. Until markets are convinced they see the end in sight for Fed
tightening, the yield curve will stay inverted."
