Days like yesterday illustrate how well Jerome has done his job as he sees it. It has been reported that he has said the most important thing is what the market thinks the FED will do, not what it actually does. Jerome has convinced a lot of big time market analysts and Fortune 500 CEO’s that he is going to take the economy into a recession in order to curb inflation.
To me the important factor in this economic and market equation is the consumer. I like to observe people I have known over the years, people that are not market players so much, regular people, in all phases of life. My kids, in their 40’s and early 50’s, my grandchildren in their late teens to early 20’s, what are they saying. So far, the grumble about high gas and food prices dominates the discussion. Panic talk about a recession or curbing home or car purchases is not in play. And then there are the private company owners that I know, while there isn’t much talk about it anymore, the money that Trump and Biden deployed in the pandemic seems to still be sitting, waiting for an opportunity.
So, I don’t see the recession playing out, this is nothing like 2000 and 2008 experience.