Few parts, part one is an assessment of current recession risks. And i would argue that they are considerable, high and rising and will go through the logic as to why. Or two, most recessions or all recessions have a proximate cause generally lots of things going on that are behind the downturn but you can put your finger on the thing that is the approximate reason for the downturn. All do that and ill talk about what could take us down, trade war would be a topic. We can talk about that in some detail. Then well talk about the roadmap to recession, a lot of different indicators, you want to be focused on to gauge how things are playing out whether hes right or wrong. Then well talk about policy. Monetary policy and the response to recession and because Interest Rates are already very low, the federal funds rate target is at 2 today, i think next week itll be a one and three quarters. Thus on a whole lot of room between that and 0. That is we need fiscal policy to play a key role in th
The talk is broken down into a few parts, part one is an assessment of current recession risks. And i would argue that they are considerable, high and rising and will go through the logic as to why. Or two, most recessions or all recessions have a proximate cause generally lots of things going on that are behind the downturn but you can put your finger on the thing that is the approximate reason for the downturn. All do that and ill talk about what could take us down, trade war would be a topic. We can talk about that in some detail. Then well talk about the roadmap to recession, a lot of different indicators, you want to be focused on to gauge how things are playing out whether hes right or wrong. Then well talk about policy. Monetary policy and the response to recession and because Interest Rates are already very low, the federal funds rate target is at 2 today, i think next week itll be a one and three quarters. Thus on a whole lot of room between that and 0. That is we need fiscal
Downturn but you can put your finger on the thing that is the approximate reason for the downturn. All do that and ill talk about what could take us down, trade war would be a topic. We can talk about that in some detail. Then well talk about the roadmap to recession, a lot of different indicators, you want to be focused on to gauge how things are playing out whether hes right or wrong. Then well talk about policy. Monetary policy and the response to recession and because Interest Rates are already very low, the federal funds rate target is at 2 today, i think next week itll be a one and three quarters. Thus on a whole lot of room between that and 0. That is we need fiscal policy to play a key role in the response and not talk about that and put into the context of experience that we had ten years ago now with the recovery act and other policy responses. Does that sound okay . Okay. Part one recession risks, as they said their height and rising, that gives you a sense, this is a major
Saying america is winning the trade with china but the u. S. Deficit is set to balloon to 1 trillion. Hong kong protesters mark one month since gang attacks on the subway. Wantswants beijing companies to toe the line. Shery lets get a quick check of the market close in the u. S. Stocks are higher but after paring back some of those earlier gains, every sector in the s p 500 was in the green. We had Consumer Discretionary and tech leading the way. Not to mention we had numbers out of retailers like lowes. We also had them from target. That helped with investor confidence. We had home depot showing signs that the second half would be strong. We had seen that rally. This is adding to the sentiment. At the same time, we have the fomc minutes. After that, the twoyear treasury yield rallying. And we have eight the yield curve and we have the yield curve inverting. S p active futures up. 2 . Lets see how we set up in asia. Sophie asian stocks brushing off the midweek fumble. Qantas and calls
Market but bond market and this inversion of the yield curve. We can talk about what youre seeing, what people are telling you. The bottom line, if history is a judge this could mean recession is on the way. Reporter makes people so anxious, connell. Yields on two year treasurys rising above the yield on a 10year. First time since 2007. That date alone spook as lot of investors. The yield curve on shorter end, now as people call it inverted. The reason it makes so many people anxious, that means investors have less confident in the near term economy versus the long term economy. Normally if you loan money in this case to the government for a short period of time, you expect your principle plus a small payment, youre not loaning money for that long. If you lend money longer you expect a bigger pay back. That is the normal logic of the bond market. You get paid more for lending longer. When this pattern reverses like now, it signals a shift in the pattern, signals a problem for a lot of