August 19, 2019

Giving Credit Where It’s Due

The US economy is probably going into recession. Manufacturing production is down from the late-2018 highs, retail spending growth, wages and payroll gains have slowed. Most importantly, nominal GDP growth has slowed while markets have taken a bearish turn, sending the NGDP outlook below 2%. While it is true that the S&P 500 is near an all-time high, the index has oscillated around the current level for more than a year, and stocks by themselves are only a noisy indicator of the near-term NGDP growth. TIPS, and conventional bond spreads are in the toilet, with spreads between the long and… Read More