Since you were so taken by the merit and import of Moody’s downgrade the other day, here's what Mark Zandi, Chief Economist for Moody’s Analytics has to say about the effect of Bidenomics:
"A year ago, the strongly held consensus (which didn’t include me) expected a recession dead ahead. This view was rooted in history - in times past when inflation was high and the Fed was jacking up rates, recession followed. But the consensus has been wrong, this time is different.
Economists loathe uttering the words “this time is different” because more often than not, it isn’t. But there are times when it is, and while there’s more script to be written, this appears to be one of those times. Inflation is moderating without recession or even a slowdown.
What the pessimists got most wrong was thinking the inflation was due to strong demand, and to rein it in required much higher rates and a recession. Instead, the inflation was due to the pandemic and Russian war. As these supply shocks fade, so does inflation, without recession.
There are other reasons why this time is different. Excess saving built up in the pandemic has supported consumer spending. And businesses won’t layoff given how difficult the pandemic made it to find and retain workers. Without spending cuts and layoffs, recessions won’t happen."
Tuesday update: Consumer prices rose 3.2 percent in the year through October, decelerating from the previous month and showing encouraging signs under the surface.
Shelter inflation slowed significantly in October, rising 0.3 percent after being up 0.6 percent a month earlier. That’s a big deal, because rents and other housing costs are the biggest part of the price index, and they have been stubbornly slow to ease.
President Biden won’t be weighing in on these numbers until later this morning, but suffice it to say his economic team will be happy with this report. It’s exactly the sort of cooling they want to keep seeing.
Stock futures rose sharply following the fresh numbers, up almost 1 percent for the day on the S&P 500. It appears the cooler numbers have heightened hopes among investors that the Fed will keep interest rates steady going forward, with the two-year Treasury yield, which is sensitive to changes in interest rates expectations, falling markedly.
Companies that sell household staples are starting to slow down price increases as shoppers pinched by inflation start pulling back.
Airfares to many popular destinations have recently fallen to their lowest levels in months, and even holiday travel is far cheaper than it was last year, providing some welcome relief to consumers.
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Since you were so taken by the merit and import of Moody’s downgrade the other day, here's what Mark Zandi, Chief Economist for Moody’s Analytics has to say about the effect of Bidenomics:
"A year ago, the strongly held consensus (which didn’t include me) expected a recession dead ahead. This view was rooted in history - in times past when inflation was high and the Fed was jacking up rates, recession followed. But the consensus has been wrong, this time is different.
Economists loathe uttering the words “this time is different” because more often than not, it isn’t. But there are times when it is, and while there’s more script to be written, this appears to be one of those times. Inflation is moderating without recession or even a slowdown.
What the pessimists got most wrong was thinking the inflation was due to strong demand, and to rein it in required much higher rates and a recession. Instead, the inflation was due to the pandemic and Russian war. As these supply shocks fade, so does inflation, without recession.
There are other reasons why this time is different. Excess saving built up in the pandemic has supported consumer spending. And businesses won’t layoff given how difficult the pandemic made it to find and retain workers. Without spending cuts and layoffs, recessions won’t happen."
Tuesday update:
Consumer prices rose 3.2 percent in the year through October, decelerating from the previous month and showing encouraging signs under the surface.
Shelter inflation slowed significantly in October, rising 0.3 percent after being up 0.6 percent a month earlier. That’s a big deal, because rents and other housing costs are the biggest part of the price index, and they have been stubbornly slow to ease.
President Biden won’t be weighing in on these numbers until later this morning, but suffice it to say his economic team will be happy with this report. It’s exactly the sort of cooling they want to keep seeing.
Stock futures rose sharply following the fresh numbers, up almost 1 percent for the day on the S&P 500. It appears the cooler numbers have heightened hopes among investors that the Fed will keep interest rates steady going forward, with the two-year Treasury yield, which is sensitive to changes in interest rates expectations, falling markedly.
Companies that sell household staples are starting to slow down price increases as shoppers pinched by inflation start pulling back.
Airfares to many popular destinations have recently fallen to their lowest levels in months, and even holiday travel is far cheaper than it was last year, providing some welcome relief to consumers.
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