How Long Do You Think It Will Be?

[gregb]

We shall see how and if the GDP is impacted:

https://psmag.com/economics/the-trump-trade-war-is-back-on

https://www.ft.com/content/4bd6a57a-2874-11e8-b27e-cc62a39d57a0

 

[Joe Flacco]

This is rax revenue history during Reagan.

https://www.thebalance.com/current-u-s-federal-government-tax-revenue-3305762

 

[Randolph Kinney]

One More Hike To Inversion - Treasury Curve Plunges To Flattest Since July 2007

Remember 9 of the last 10 curve inversions have rapidly presaged a recession (and the last two curve inversions saw the stock market cut in half).

 

[Randolph Kinney]

But what is most troubling is that when one overlays the Underlying Inflation Gauge with core CPI, with a 15 month lead for the former, what emerges is the following troubling chart: it shows that all else equal, core CPI is set to spike in the coming months, and from its current level, is set to rise as high as 2.8%, matching the highest print since 2006 when the Fed Funds rate was around 5%, and a level which not even the Fed's latest "symmetric" mandate would be able to ignore, forcing Jay Powell to tighten even more aggressively over the coming year.

Looks like inflation will hit 3% by the end of the year which means the FED will be hiking its feudal funds rate more vigorously in the future. That is not a good news for the housing market. As interest rates rise, housing payments increase and homes become less affordable choking off demand. Inventory will increase. Those that have to sell will drive down prices.

 

[Gobears81]

But what is most troubling is that when one overlays the Underlying Inflation Gauge with core CPI, with a 15 month lead for the former, what emerges is the following troubling chart: it shows that all else equal, core CPI is set to spike in the coming months, and from its current level, is set to rise as high as 2.8%, matching the highest print since 2006 when the Fed Funds rate was around 5%, and a level which not even the Fed's latest "symmetric" mandate would be able to ignore, forcing Jay Powell to tighten even more aggressively over the coming year.

Looks like inflation will hit 3% by the end of the year which means the FED will be hiking its feudal funds rate more vigorously in the future. That is not a good news for the housing market. As interest rates rise, housing payments increase and homes become less affordable choking off demand. Inventory will increase. Those that have to sell will drive down prices.

Based on your prior posts combined with the above, it looks like you are predicting stagflation? I don't follow current economic news as much as many on here, but that seems to require a perfect storm of issues to happen and personally strikes me as unlikely. That's not to suggest that I don't have some serious intermediate and longer-term concerns about the economy, but inflation is not anywhere near the top of the list of those concerns

 

[Randolph Kinney]

Yes, stagflation or worse. Throwing fiscal stimulus into the economy will create demand for goods and services. But at the same time, the federal reserve is applying the monetary brakes, raising interest rates and decreasing the money supply. Inflation is heating up.

Last year's tax cuts and spending increases will likely provide less of a boost to economic growth than many forecasters predict—and possibly none at all. That’s because the changes took effect at a time when the economy was already firing on all cylinders. As a result, there are fewer unemployed workers, spare resources and idled factories ready to kick into action than there would have been during a downturn, Federal Reserve Bank of San Francisco economists said in a new report. Indeed, the next recession could be worse as a result: “The projected procyclical policy over the next few years may raise concerns regarding the nation’s fiscal capacity to respond to future downturns and its ability to manage the growing federal debt."

 

[Randolph Kinney]

Businesses from dollar stores to hotel operators to fast-food chains have warned in recent months that higher labor costs have been a drag on their profits—a potential headwind for the nine-year stock-market rally, Danielle Chemtob reports. Wages have risen at least 2.5% for 16 of the past 17 months, a faster pace than recorded earlier in the expansion. That is good news for U.S. workers. For companies facing trade-related tensions and struggling to pass on higher costs, it's not. Economists at Goldman Sachs predict that every percentage-point increase in labor-cost inflation will drag down earnings of companies in the S&P 500 by 0.8%.

 

[Eli]

The free money of the last recession is getting ready to take it’s toll.

Not just U.S.

 

[Randolph Kinney]

Fueled by cheap money, investors have gone on a decade-long, $11 trillion corporate borrowing frenzy. But the era of easy money is coming to an end, and it may spell disaster for some.

 

[timd354]

View attachment 36000

This is rax revenue history during Reagan.

https://www.thebalance.com/current-u-s-federal-government-tax-revenue-3305762

yes, as a result of Reagan's tax cuts, the economy was boosted which resulted in much higher tax revenue. the problem was that the growth in government spending over the same time period outpaced the growth in tax revenue