Plain English with Derek Thompson Five Reasons Everybody Is Wrong About a U.S. Recession—Including Me
Jun 28, 2022
Conor Sen, founder of Peachtree Creek Investments and economic columnist for Bloomberg, challenges the prevalent doom-and-gloom narrative surrounding the U.S. economy. He points out that recent income growth and robust job markets are often overshadowed by fears of recession. The discussion dives into the resilience of the banking system and the shift from goods to services, highlighting the booming leisure economy. Sen also addresses the complexities of urban redevelopment amidst rising costs, providing a fresh perspective on the current economic landscape.
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Prevailing Negativity
- The prevailing wisdom about the economy has become overly negative, setting a low bar for positive surprises.
- Real-time data matters more than usual when negativity is high, offering potential for a more balanced perspective.
Inflation Drivers
- Inflation is driven by energy and commodity prices, factors outside the Fed's direct control.
- Real-time data on shipping rates and commodities offers mild optimism despite high inflation.
Commodity Price Drop
- Dropping commodity prices are linked to recession fears and trend-following investor strategies.
- High commodity prices are unsustainable during a recession, leading investors to sell.