The Fed Waffles...The problem was that the Fed continues to ignore the most important issue in monetary policy.

Hard Landing, Soft Landing, or No Landing? In the past few weeks, a growing chorus of economists and investors have decided that the pessimistic narrative had it wrong all along, that the US isn’t headed for a hard landing,...or soft landing...

Monetary Mayhem Clouds Crystal Ball. At present, the futures market appears to be pricing in three more rate hikes this year, 25 basis points each, with one rate cut of 25 basis points very late this year.

The Game Isn't Over. Unprecedented actions on the scale that we experienced in 2020-2022 will bring unexpected results in 2023. So, while we never want to ignore a number like the January jobs report, we have to question how much is signal and how much is noise.

Rearview Mirror OK, Collision Ahead. First, the good news: we estimate that real GDP grew at a solid 2.8% annual rate in the fourth quarter. But you shouldn’t dwell on the solid GDP report that comes out Thursday. Why? Because the report shows what’s going on in the rearview mirror. Meanwhile, there’s an economic collision ahead.

Soft Landing? Our forecast for real GDP growth this year is -0.5%, with inflation remaining above 4%. In other words, a recession with higher inflation – stagflation. That’s what we expect…and it’s not a soft landing.

Not Goldilocks. Not long after Friday’s Employment Report multiple analysts and commentators were calling it a “goldilocks” report, by which they meant it showed that the economy was neither “too hot” nor “too cold,” but instead, “just right.”

Still Unprecedented. What a difference a year makes!

S&P 3,900 – Dow 33,000. Predicting stock values in 2023 is tough. Unprecedented actions during COVID leaves a wide range of possible outcomes.

A Plow Horse with Shin Splints... Look for a recession to start in the second half of 2023, with some possibility of it starting earlier in 2023 and some possibility of a delay until early 2024. Until then, expect mediocre economic growth.