Tuesday, February 7, 2023
HomeInvestmentRecession is right here and main liquidity squeeze on-going. US Treasuries count...

Recession is right here and main liquidity squeeze on-going. US Treasuries count on a Fed pivot and both deep US recession or scarcity of collateral. Neither look nice for inventory markets

Ex-Fed insider: A full-blown recession is nearly actually coming

New York (CNN Enterprise)The Federal Reserve’s warfare on inflation will ultimately kill the financial restoration from Covid-19, former Fed official Invoice Dudley warns.

The issue is that the Fed started its quest to tame inflation late, leaving the central financial institution little alternative apart from to slam the brakes on the financial system by drastically elevating rates of interest.
“Nearly actually there might be a full-blown recession. If we’re not in a single but, I feel we might be within the subsequent 12 months,” Dudley, the previous president of the New York Federal Reserve, informed CNN in a telephone interview.

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US Treasury Yield Curve Inverts Additional To -37.6, Most Inverted Since 2000

And the “scorching” jobs report isn’t feeling any love within the bond market the place the US Treasury yield curve (10Y-2Y) deepened its inversion to -37.593 foundation factors, a drop of -1.331 BPS. Notice that the 10Y-2Y curve falls under 0% simply prior to each recession.

Summers Warns of ‘Financial Misery’ As Fed’s Powell Holds Out Hope

Some economists — together with former Treasury Secretary Larry Summers — say Powell is being a lot too optimistic concerning the Fed’s means to tame costs with out pushing unemployment a lot greater. The implication: The Fed chief, who has sought to raise the central financial institution’s deal with boosting the labor market, could also be compelled to just accept thousands and thousands of job losses and a major recession to curb inflation.

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