Q4, 2023: Drained

Growth, Inflation & Policy As of October 23, 2023 Economic Activity The Conference Board’s Leading Economic Index (LEI) has been negative for 18 consecutive months and continues to signal a looming recession and subsequent slowdown in economic activity. However, estimates for the severity of the recession eased over the quarter, with the Conference Board forecasting a…

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Q3, 2023: The Running of the Bulls (and Bears)

Growth, Inflation & Policy As of July 28, 2023 Leading Economic Indicators The Conference Board’s Leading Economic Indicators (LEI) is used to forecast future economic activity. Since 1988, the U.S. LEI has dropped below zero over a six-month period on ten occasions. On five of those occasions, the LEI has dropped below -4%, signaling a recession…

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Q2, 2023: Tick Tok

Growth, Inflation & Policy As of April 23, 2023 GDP & Inflation Over the quarter, inflation continued to tick lower. Despite the recent banking system instability and the collapse of two large banks in the U.S. in mid-March, the Federal Reserve has continued to hike rates. The most recent rate hike highlights the predicament that the…

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Q1, 2023: Money Like Water

Growth, Inflation & Policy As of January 3, 2023 INFLATION AND GDP Despite inflation starting to slowly tick lower over the last quarter, the probability of the U.S. heading into a recession in the next 12 months has become almost certain. Bloomberg’s recession probability model has correctly predicted a recession within 12-months every time the series…

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Q4, 2022: Whac-A-Mole

Growth, Inflation & Policy As of November 1, 2022 INFLATION, GDP AND VALUATIONS Historically low inflation has led to strong asset returns and structurally higher equity multiples, but there may be a return to a more volatile macroeconomic regime. Even though inflation (as measured on a year-over-year basis) is expected to roll over, this does not…

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Q3, 2022: When Doves Cry

Growth, Inflation & Policy INFLATION TRENDS Cleveland Fed inflation nowcast for July is currently at 8.9% Y/Y, not providing significant relief from June’s surprise upside surprise of 9.1%. Inflation needs to come in below 0.5% in July M/M in order to decelerate. For reference, for CPI to subside to 5% Y/Y, inflation needs to come…

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Q2, 2022: A Nickel For Your Thoughts

Growth, Inflation & Policy SLOWING GDP GROWTH Growth is unquestionably decelerating, while inflation prints are seemingly perpetually overshooting. Coming into the year, we believed inflation would be the key driver of economic and capital-market returns. Putin’s invasion of Ukraine has only served to intensify this critical dynamic and has put the Federal Reserve in a…

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Q1, 2022: Candyland

Growth, Inflation & Policy SLOWING GDP GROWTH Growth is unquestionably decelerating, while inflation prints are becoming increasingly important. Should we see inflation accelerating from here, expect fireworks. If inflation however starts to decelerate, it could be a decent year for risk assets. While we are watching inflation as the primary driver of outcomes this year,…

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