Coronavirus Helicopter Money

Policy Shocks

My Best Guess on the Future

A Consumer-Led Recession

Don’t Ask, Don’t Test

One Major Caveat

The Right Thing

New York and Back to Puerto Rico

I write this letter early Friday morning after a week in New York visiting with many fellow market participants. And lots of phone calls, both to analysts and medical experts. I had originally planned a completely different letter but circumstances changed.

Humility is a good thing to have when you’re forecasting the economy or markets. You never know what relevant facts you might be missing, so it’s best not to be too confident.

In my annual and decade forecasts, published just two months ago, I said recession probably wouldn’t happen this year, absent an exogenous event. Now, thanks to COVID-19, I am far less confident in that forecast. We have an exogenous event underway that might change everything.

Today we’ll consider where this is all headed and what could happen—not medically (others can address that) but economically. The coronavirus could take us all someplace we really don’t want to go.