A Recession Is Coming, Or Is It?

Since the beginning of 2022, the media has regularly warned a recession is coming. As we suggested previously, if a recession DID occur, it would be the most well-forecasted recession ever on record.

“While the ‘probabilities’ of a recession in 2023 seem far more significant, what bothers us with the recession/hard landing view is that everyone thinks the same. As Bob Farrell once said, ‘When all experts agree, something else tends to happen.’”

most anticipated recession

Something else has indeed happened. As discussed in “Signs, Signs, Everywhere Signs,” numerous measures suggest a recession is forthcoming. However, that recession has yet to reveal itself. Such has led to a fierce debate between the bulls and the bears. The bears contend that a recession is still coming, while the bulls are betting more heavily on a “no landing” scenario or, instead, avoiding a recession. Even the Federal Reserve is no longer expecting a recession.

But how is a “no recession” outcome possible amid the most aggressive rate hiking campaign in history, deeply inverted yield curves, and other measures warning of its inevitability?

economic putput

We find the answer in the “money trail.”