Let us talk about the most recent #FOMC! Powell had quite a lot to say about the #labor market, #recessions, #inflation, and the #banking crisis. What do the markets think about the next FOMC meeting?
The unemployment rate came in today at 3.4%, once again showing the resilience of the US economy and the labor market. In this video we talk about the jobs market by discussing job openings, initial claims, continued claims, recessions, and more!
The inverted yield curve persists and we are starting to see more lower time frames invert higher timeframes. What does this mean? In this video we talk about the inverted yield curve within the context of the price of #Bitcoin.
Based on many questions I have seen surrounding recessions and their impact on risk assets like #SPX, I thought we could spend some time looking at historical #recession statistics. In this video we look at things like the difference between when a recession starts and when it is declared, as well as when the #SPX tends to bottom with respect to the declaration of the recession.
The Composite Leading Indicator (CLI) is a tool composed of a combination of various economic indicators, such as business sentiment, consumer confidence, and industrial production, which are used to forecast future economic activity. The CLI is normalized to fluctuate around its long-term average of 100.
The CLI is designed to provide early signals of turning points in business cycles. Its relationship with recessions is that a decline in the CLI is often seen as a warning of a potential downturn in the economy and can signal that a recession may be on the horizon. It is worth noting that CLI alone is not enough to predict a recession and other indicators should be consulted to confirm the recession. However, it can provide valuable insight into the direction of the economy and help anticipate changes in economic activity.
The Sahm Rule is a recession indicator that was developed by economist Claudia Sahm. It is based on the idea that changes in the unemployment rate can be used to identify the onset of a recession. The rule states that if the three-month moving average of the unemployment rate increases by 0.5 percentage points or more above its low for the previous year, it is considered a recession signal. The indicator is considered simple and quick to use, and has shown to be a reliable indicator of recessions in the past.
Recessions are usually determined retrospectively. In other words, it is only after a period of economic decline that it can be determined that a recession has occurred. The National Bureau of Economic Research (NBER) is the organization that officially declares when a recession has begun and ended in the United States. Indicators like the Smoothed U.S. Recession Probability and the Sahm Rule could give a headstart in the speculation that a recession has already started while not officially declared.
For example, the Great Recession of 2007-2009 was officially declared by the National Bureau of Economic Research (NBER) to have begun in December 2007. It was not until over a year later, in December 2008, that the NBER officially announced that the U.S. was in a recession. Meanwhile, the Sahm Rule signalled a recession in February of 2008.
It has been a few months since we had a dedicated video on the treasury yield curve, so let us provide an update. As you can see, the yield curve has changed quite a bit over the last three months! In this video we talk about the likely eventual implications of an inverted yield curve.
Let’s jump into the real estate verse! In this video we take a look at several different metrics surrounding the real estate market, and use this information to discuss some things to watch for in 2023. Let me know what you think of this video on #realestate in the comments!
Yet again, we find ourselves on the eve of the next #FOMC. What will Powell say? Will the Fed Funds Rate increase by another 25 bps? Or will markets be surprised with something different? How will this affect risk assets? Why are risk assets rallying? In this video we talk about various views, the nuances of the views, and ongoing changes in economic data to watch to better identify the changing probabilities of a soft vs. hard landing.
