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‘Soft Landing’ Is Out. ‘Growth Recession’ Is In.

The Breakdown

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The Fed's Balance Sheet Reduction Programe

The aging of the population and the impact of long coved imply that the participation rate will be slow to return to its prependemic level. This puts a lot more onus on the inflation numbers as the factor that will have the biggest decision on the next rate hike at september p o m c meeting. The one other thing, however, to watch for during september is that we're not just experiencing rate hikes right now, but actual quantitative tightening. And the balance sheet declines will become more apparent in the coming months.

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