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Ina Fassbender/AFP/Getty Images More than 80 central banks are aggressively raising interest rates to cool inflation. Rate hikes are the best tool for easing price surges but bring with them the risk of recession. The synchronized rate hikes could throw the world economy into a slump. Countries around the world are rushing to crush inflation. […]
Top economist Mohamed El-Erian said many have lost faith in the Fed. Photo by Rob Kim/Getty Images The Fed raised interest rates by 75 basis points on Wednesday, marking its third straight rate hike. It signaled more hikes ahead to tame inflation, but the move risks tipping the economy into recession. El-Erian said higher, faster […]
The pound has climbed against the euro after figures showed Italy fell into recession at the end of 2018, while German consumers stopped spending in December. Sterling has endured a political rollercoaster this week after MPs voted in Parliament on Brexit for Prime Minister Theresa May to return to Brussels to try and thrash out […]
The spread between US 2-year and 10-year bond yields – a key indicator of recessions – fell sharply to its lowest level in 11 years this week. Deutsche Bank says the risk of a recession is “very low” over the next 12 months, but rises significantly to 80% over a three-year time frame. However, the […]
AP Images A number of commentators are stressing the necessity for the Fed funds rate to exceed the inflation rate for a recession signal. But the Fed funds rate didn’t exist until 1954. And it didn’t exceed the 10-year Treasury yield before the 1957 or 1960 recessions. For the last decade I have made a […]
Getty Images / Mario Tama The US yield curve has been flattening over recent months. Risk of inversion, a key recession signal, rises as the curve flattens. The 1969-70 recession can offer us a look at what today’s yield curve movements might mean. The persistent flattening of the U.S. yield curve has investors scratching their […]
In this series, we have outlined black swan events that, while extremely unlikely, would lead to extremely negative global economic consequences — a disintegrating European Union, massive interest rate increases in response to runaway inflation, a flash crash that reveals the perils of financial leverage and China’s disruption of the financial world order by pricing […]
Drew Angerer/Getty Images The number of foreclosures in New York City have hit the highest volume since 2009, a PropertyShark report found. The number of foreclosure cases have doubled in the last two years. New York Governor Andrew Cuomo has maintained that the GOP’s tax overhaul would only contribute to more mortgage foreclosures. It’s […]
Federal Reserve officials are actively considering a shift away from their current inflation targeting framework toward more aggressive measures to combat ultra-low inflation. However, the barrage of ideas being offered up adds to confusion about the outlook for monetary policy, and neglects the importance of the Fed’s employment mandate. New ideas range from price-level targeting, […]
HEMET, California—Many cities across America are doing better today than they were before the recession. This is not one of them. A decade after the start of the Great Recession, it struggles with pervasive crime and poverty. “We’re still recovering—we were really hit hard on all levels,” Linda Krupa, the mayor of Hemet, told me. […]
