It sure feels as though we are in a recession:
- Weak reports from retailers such as Amazon (AMZN) and Target (TGT, twice in Target’s case).
- Soft retail numbers HERE.
- Low consumer confidence HERE.
- Atlanta Fed’s new GDPNow estimate (as of June 15th), is zero percent Real GDP for Q2.
- Depleted personal savings (chart below).
- Even Johnny Come Latelys like Guggenheim’s investment chief Scott Minerd are coming around to the idea that the U.S. may be in a recession while we are in the midst of tightening monetary policy (see YouTube video interview with Mr. Minerd below).
However, while the capital markets believe a recession will cure inflation, it will not in the near-term. The trillions of dollars of excess liquidity added to the economy in 2020 and 2021 will take years to work through the system before we see a CPI that resembles 2%.