The Great Moderation has given way to the Great Stagflation...
... which will be characterized by instability and a confluence of slow-motion negative supply shocks.
US and global equities are already back in a bear market, and the scale of the crisis that awaits has not even been fully priced in yet.
Notwithstanding their hawkish talk, central bankers, caught in a debt trap, may still wimp out and settle for above-target inflation.
Since World War II, there has never been a case where the Fed achieved a soft landing with inflation above 5% (it is currently above 8%) and unemployment below 5% (it is currently 3.7%). And if a hard landing is the baseline for the United States, it is even more likely in Europe
Nouriel Roubini ProjectSyndicate 3 October 2022
Roubini Expects a ‘Long, Ugly’ Recession and Stocks Sinking 40%
Bloomberg 20 september 2022
https://englundmacro.blogspot.com/2022/09/roubini-expects-long-ugly-recession-and.html
Kommentarer