Great News! Yellen Says No Sign of Recession, Krugman Says Economy Will Shrink

Hip, Hip Hooray! Perhaps the recession has left town, according to Janet Yellen, who sees solid growth and a strong labor market as positive signs the Fed's efforts to fight inflation are not hurting the economy significantly. I guess she doesn't drive, fill up her car, eat food, or buy groceries. 

Janet Yellen said she doesn’t see signs of a recession, but Nobel laureate Paul Krugman argues the worst is yet to come | Fortune 

But the good news is Paul Krugman speaking up in disagreement with the Treasury Secretary. Krugman sees an upcoming downturn: "While this report made all the people who screamed 'recession!' look as foolish and partisan as they were, it was not, if you look under the hood, a sign that the worst is over," Fortunately the Krugman prediction phenomenon can be put into play here. He does not get it right everytime, or some say, even most of the time. So, in fact, he may be in agreement with Yellen, using some obscure prediction logic analysis. Be keep in mind, past performance does not indicate future performance.

The Daily Caller has categorized the Krugman prediction phenomenon. Here Are Paul Krugman’s Worst Predictions Ever–They’re Really Bad | The Daily Caller

Recession Alert! Bloomberg Calls It 100% Certain! Prepare!

Bloomberg has predicted the absolute certainty of a US economic recession in 2023, most likely before October. The economic model may mean the Federal Reserve has gone too far in raising interest rates in their thus far futile attempts to constrain inflation.

No model is certain, just an educated guess disguised as a mathematical projection by experts. Have faith, these experts are not always right. But this one seems pretty dire any way you look at it, especially when we have a flock of other experts parroting similar outlooks. 

Your best bet? Beware and Prepare! The next Fed meeting November 1-2 may give us some direction. 

The stock market is highly volatile right now. Be careful! Watch for a 'risk-off' flight to quality. And CD's are becoming more and more attractive for safety and income. 

Bloomberg: https://www.msn.com/en-us/money/markets/forecast-for-us-recession-within-year-hits-100-in-blow-to-biden/ar-AA133nzh

But be sure of one thing, when the rate hikes stop, there will be a few months of wait and see, then we might just see one great stock buying opportunity.

Can the Fed Deliver a Soft Landing? Maybe!

The Fed has a chance to avoid a deep prolonged recession and avoid the disaster that it would entail. They may even come to their collective senses. 

There is a voice of reason from Chicago Fed President Charles Evans in his optimistic speech to a National Association for Business Economics conference could be heard clearly describing a path to a soft landing.

Check it out: Evans: Close Alignment On Rate Hikes, Still Chance For Soft Landing – Options Trading Report

So, is the rest of the Fed Board listening? 

Thursday will bring a lot of information, Inflation and unemployment rates being the most anticipated. Maybe the economic tailspin we are in right now can be stopped before we crash.

Future Fed Forecast. Interest Rate, Inflation, Housing, Employment Pedictions

Inflation and Interest Rates are the two main concerns for most working class people taking money out of their pockets, taking food out of their mouths, and too often taking hope out of their lives. 

Will the Fed succeed in bring some relief? Not for quite a while. Expect interest rates to continue to rise for the rest of 2022 and into 2023. Inflation won't be whipped for a couple quarters, unless we get pushed into a deep recession. Housing prices will continue to drop and the unemployment rate slowly rise.  

NerdWallet has some good insights: https://www.nerdwallet.com/article/finance/timeline-for-lower-prices-and-rates

Be aware and prepare! Pay off those high interest rate credit cards, save up some emergency funds, and keep a few bucks on hand, there will be a sale on some quality dividend stocks.  

IMF Calls For Fiscal Responsibility. Is the Fed listening? Is Biden?

 A darkening world economic outlook, indeed. IMF downgrades world growth projections with the rising risks of worldwide recession.  

It would seem the IMF is worried about inflation. I wonder if these folks and the Fed get their haircuts at the shop? 

UPI breaks the news: https://www.msn.com/en-us/money/markets/imf-presents-darkening-outlook-for-global-economy/ar-AA12FT6x

For reference, in case you were wondering, check out the last 20 years of USA GDP growth. 

U.S. GDP Growth Rate - Historical Data
Year	GDP Growth (%)	Annual Change
2021	5.67%	9.08%
2020	-3.40%	-5.69%
2019	2.29%	-0.63%
2018	2.92%	0.66%
2017	2.26%	0.59%
2016	1.67%	-1.04%
2015	2.71%	0.42%
2014	2.29%	0.45%
2013	1.84%	-0.44%
2012	2.28%	0.73%
2011	1.55%	-1.16%
2010	2.71%	5.31%
2009	-2.60%	-2.72%
2008	0.12%	-1.89%
2007	2.01%	-0.77%
2006	2.78%	-0.70%
2005	3.48%	-0.37%
2004	3.85%	1.06%
2003	2.80%	1.10%
2002	1.70%	0.74%

The Fed's Fatal Flaw - Using a Wrong Measurement to Fight Inflation.

The Fed has won the Battle against Inflation. They just don't know it. 

Opinion: The Fed has won a major battle against inflation but doesn't believe it because the data have a fatal flaw - MarketWatch

By keeping on the track to raise interest rates and to reduce buying mortgage backed funds, they may be forcing the USA, and maybe the world, into a severe, prolonged and deep recession. 

Biden's Recession is here! 2022 Q2 and Q3 GDP drops and inflation is raging at 9%

Well, that didn't take too long. 

Almost to the day, 18 months after Joe Biden took office the USA has officially entered into a recession. Two sequential quarters of economic data reported a declining Gross Domestic Product (GDP).

And don't let anyone fool you! This is the definition of a recession. They may try to call it by another name or even deny it. Every possible distraction will be announced and pronounced, proclaimed and exclaimed.  

Economy shrinks for second consecutive quarter as Biden mocks recession 'chatter' - Washington Times

A Recession Before the Midterms: History is Not on Biden's Side (msn.com)

Biden: Economy slowing down but not in recession (usatoday.com)