Morning Wire Did We Dodge a Recession? Plus: Inflation, Housing & Consumer Spending | Saturday Extra
Oct 21, 2023
Experts discuss the resilient job market despite inflation worries. Recent inflation rates have declined, but essential prices remain a concern. Rising interest rates are squeezing housing affordability, altering buyer behavior. Meanwhile, unexpected consumer spending is rising, but so is credit card debt, posing risks for financial stability. Geopolitical conflicts, especially in the Middle East, inject volatility into markets, presenting unique opportunities for savvy investors.
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Recession Prediction
- The US is not officially in a recession, but one is likely coming soon, possibly by the end of the year or early next year.
- The government has delayed the recession through monetary policy, but rising interest rates suggest trouble ahead.
Inflation Persists
- Inflation has decreased from its peak of 9.4% but remains a concern, with the latest CPI at 3.7%.
- This "disinflation" means prices are still rising, just slower, particularly for essential goods like food and energy.
Housing Market Adjustment
- Rising interest rates make housing unaffordable, requiring prices to decrease.
- With mortgage rates around 7.5-8%, buyers are becoming more cautious, and sellers must adjust their expectations.