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Sorry, but I Still Think a Recession Is Coming

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Summary

In this article, Opinion columnist Peter Coy explains why he believes a recession is still likely to happen in the near future, despite economists predicting a soft landing. He cites data points such as the 15-month decline of the Conference Board's Leading Economic Index, and the fact that the yield curve has inverted more this year than in its records dating back to 1982, as indicators of a potential recession. He also points to the Federal Reserve's recent rate hikes as a possible cause of the downturn. Despite the optimism of some economists, Coy believes that the evidence of a recession is too strong to ignore.

Q&As

What are economists forecasting for the US economy?
Economists are forecasting a "soft landing" in which the economy continues to grow, but more slowly.

What are the five reasons economist Mark Zandi gave for why the economy will avoid a recession?
The five reasons economist Mark Zandi gave for why the economy will avoid a recession are: consumers still have some unspent savings from the pandemic stimulus; businesses will be slow to lay off workers even if conditions worsen; household and business debt loads are light; inflation expectations are low and well-anchored, so the Fed can relax; and oil prices have receded.

What data point has been used to indicate recession for many years?
The Conference Board's Leading Economic Index has been used to indicate recession for many years.

What has the Federal Reserve's rate-hiking campaign done?
The Federal Reserve's rate-hiking campaign has lifted the federal funds rate target range by 5 percentage points since March 2022.

What is the median forecast among 73 economists for the likelihood of a recession in the next 12 months?
The median forecast among 73 economists for the likelihood of a recession in the next 12 months is 60 percent.

AI Comments

👍 This article provides a thorough and detailed analysis of the potential for a recession in the near future. Peter Coy has clearly done his research and presents an objective and logical case for his prediction.

👎 This article is excessively long and provides far too much detail. It is difficult to stay engaged and the article lacks any meaningful takeaways.

AI Discussion

Me: It's about how we may be headed for a recession. The author argues that while there are a lot of optimistic forecasts from economists, there are still a few warning signs that could indicate a recession is on its way. He points to declining leading economic indexes and a yield curve inversion as two of the potential warning signs.

Friend: That's pretty concerning. What do you think the implications could be if a recession does happen?

Me: A recession could have a lot of economic implications. It could mean job losses, a decrease in consumer spending and investment, and a decrease in economic growth. It could also lead to an increase in government debt, as the government would likely have to step in to help the economy. These could all have a negative effect on the economy in the short and long term.

Action items

Research the components of the Leading Economic Index and understand how they can be used to predict a recession.
Monitor the yield curve and other economic indicators to stay informed of potential recessionary trends.
Consider the potential impacts of rising interest rates, wheat prices, and student loan payments on the economy.

Technical terms

Federal Reserve: The Federal Reserve is the central bank of the United States. It is responsible for setting monetary policy, regulating banks, and providing financial services to the public.
Yield Curve: The yield curve is a graph that shows the relationship between short-term and long-term interest rates. It is used to measure the health of the economy.
Leading Economic Index: The Leading Economic Index (LEI) is a measure of economic activity that is used to predict future economic trends. It is composed of a variety of economic indicators, such as consumer confidence, unemployment, and stock prices.
Federal Funds Rate: The federal funds rate is the interest rate at which banks borrow from each other. It is set by the Federal Reserve and is used to influence the economy.
Inflation: Inflation is an increase in the general level of prices in an economy. It is usually measured by the Consumer Price Index (CPI).
Consumer Confidence: Consumer confidence is a measure of how optimistic or pessimistic consumers are about the economy. It is based on surveys of consumer attitudes and spending habits.
Recession: A recession is a period of economic decline. It is usually characterized by high unemployment, low consumer spending, and declining business activity.