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  • Writer's pictureRaymond Kanyo, CFA

MarketBites: Recession or Soft Landing?


Portfolio Manager Commentary:

Stocks rose for a third straight day, economic data came in stronger than expected, oil fell below $100 a barrel, and the 2 and 10-year US Treasury yield (an indicator of a recession) remained inverted.

All eyes were on the Federal Reserve on Wednesday as meeting minutes were released. The Fed minutes showed that officials "agreed last month that interest rates may need to keep rising for longer to prevent higher inflation from becoming entrenched, even if that slowed the economy."

Interestingly, when the market was worried about inflation, the Fed dismissed inflation. Now that the market is worried about a recession, the Fed is busy "crushing inflation" and dismissing the possibility of a recession. According to Bloomberg Economics, US recession odds in the next year have risen to 38%.

Chart of the Day:

Bloomberg's Misery Index is already reaching the 2008 Financial Crisis highs.

Source: Bloomberg

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