Macro Outlook: Will the Fed's Pivot Save the Day? Guggenheim Partners
Comment of the Day

August 14 2019

Commentary by Eoin Treacy

Macro Outlook: Will the Fed's Pivot Save the Day? Guggenheim Partners

Thanks to a subscriber for this report by Brian Smedley for Guggenheim may be of interest to subscribers. Here is a section:

The U.S. economy is slowing as headwinds mount and tailwinds fade

The labor market is tight but is beginning to lose momentum, a clear late-cycle signal

Our research continues to point to a recession beginning in H1 2020

The next recession could be prolonged due to limited policy space at home and overseas

A looming recession means reducing risk, upgrading credit quality and extending duration

Eoin Treacy's view

A link to the fullr report is posted in the Subscriber's Area.

For a recession to begin at the beginning of 2020 growth would have to be negative in this quarter. That’s a big ask in my opinion. The one thing we know about the inversion of the yield curve spread is it has a long lead time. On the last two occasions it offered an 18-month lead indicator of trouble in the economy. That suggests we should probably be looking at after the US Presidential Election rather than before it for a source of strife. However, we will need to be guided by the price action.  

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