Tag: Recession

Commentary: A Biden Recession Is Virtually Guaranteed After 10-Year, 2-Year Treasuries Spread Inverts as Economy Overheats from Rampant Inflation

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Joe Biden

The spread between 10-year treasuries and 2-year treasuries, a leading recession indicator whose inversions have predicted almost all of the U.S. economic recessions in modern history, on March 31 inverted for the first time since Sept. 2019.

When the 10-year, 2-year spread inverts, a recession tends to result on average 14 months afterward, sometimes sooner, sometimes later. The one time there was a head fake on the 10-year, 2-year was in the mid-1990s at a time when inflation was much lower Visit Site than it is now.

As an aside, potentially the Sept. 2019 inversion might have ended up being a premature indicator, too, but then Covid and global economic lockdowns in early 2020 went ahead and ensured a recession even if one was not due. On the other hand, at that point it had been 11 years since the prior recession and so the business cycle was going to end sooner or later.

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Commentary: Seven Major Failures of the Biden Presidency

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Joe Biden

With President Joe Biden set to deliver his first State of the Union address on Tuesday night, it’s a good time to ask: How has Biden done as president and what is the actual state of our union?

According to the American people, things aren’t going great.

A CNN poll in early February asked Americans what they thought of Biden’s presidency and what he’s done right since entering office Jan. 20, 2021.

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Commentary: Inflation Has Arrived

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Wildly excessive federal spending is causing major inflation and shortages, which may lead to a recession and perhaps a financial crisis. Despite the evidence of inflation, Congress is proposing to spend $3.5 trillion on top of the $1.9 trillion COVID relief bill passed earlier this year and the intended $1.2 trillion infrastructure bill. For comparison, federal revenue is only expected to be $3.8 trillion this year.

Evidently, the Democratic Party and President Joe Biden have adopted Modern Monetary Theory (MMT) to the peril of every American citizen. MMT, which is similar to Keynesian economics, says that the U.S. should not be constrained by revenues in federal government spending since the government is the monopoly issuer of the U.S. dollar. MMT is a destructive myth that provides cover for excessive government spending. And it’s not modern, since reckless government spending has been around for thousands of years.

Embracing MMT is similar to providing whiskey and car keys to teenage boys. We know the outcomes will not be good.

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Inflation Spikes Again, Marks Quickest Increase in 13 Years

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Inflation surged 5.4% over the 12-month period ending in June, the quickest spike since August 2008, a Department of Labor report showed.

The consumer price index (CPI) increased 0.9% between May and June, according to the Labor Department report released Tuesday morning. Economists projected the report would show that CPI ticked up 4.7% between July 2020 and June, The Wall Street Journal reported.

“We’re in a transitional phase right now,” Joel Naroff, the chief economist at Naroff Economics, told the WSJ. “We are transitioning to a higher period of inflation and interest rates than we’ve had over the last 20 years.”

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Armstrong Williams Commentary: It’s Time to Talk About Recession

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Is America in a recession? It’s an unpopular question to ask, but it has now been over 3 months since COVID-19 restrictions were initiated and it is time for us to get realistic about where we are economically so that we can take the proper steps to minimize further damage to our economy. At this point, the unfortunate reality is that regardless of what we do, it is likely that it will take at least several years to see a partial recovery of economic loss and the time that it will take for a complete recovery remains unknown at this point. 

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Commentary: Is the Federal Reserve Trying to Cause a Recession before 2020?

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by Robert Romano   Did anyone notice the Fed inverted the yield curve? On May 23, the 10-year Treasury dipped below the federal funds rate, the benchmark interest rate set by the Federal Reserve that it currently has set for a range of 2.25 percent to 2.5 percent, and has stayed there since. As of June 4, the effective federal funds rate was 2.38 percent, while the 10-year is at 2.13 percent. There were also brief inversions on March 28 and May 15, but they immediately came back into positive territory. Unlike other inverted interest rates, which often foretell a recession in not so distant future, this is one the central bank actually has control over since it sets its own rate. But, there’s no need to panic. The last time those two rates briefly inverted and then stayed inverted, beginning in late March 2006, a recession did not follow until December 2007. It took 21 months. Sometimes it takes even longer than that. The time before that, the two rates briefly inverted in Sept. 1995, but the next recession did not begin until March 2001, almost six years. Another brief inversion occurred in Dec. 1985, but the next recession…

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