GlobalData TS Lombard: Perkins Vs Beamish The End of Dollar Supremacy
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Apr 16, 2025 Dario Perkins and Freya Beamish, both economists at TS Lombard, dive deep into the shifting landscape of global economics. They discuss the looming recession risks and the rivalry between China and the U.S., raising intriguing questions about who will yield first. The duo also explores the impact of tariffs and corporate choices, signaling the importance of economic indicators like the 'Perkins rule.' As tensions escalate, they examine the future of dollar supremacy and the resilience of the private sector amidst evolving market dynamics.
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Perkins Rule Signals Recession
- The key to identifying a recession is watching the labor market closely, not GDP contraction alone.
- The "Perkins rule" signals when companies start layoffs, triggering a dangerous economic feedback loop.
Manage Risk When Fed Lags
- React swiftly when the Perkins rule triggers, as the Fed will likely intervene with rate cuts.
- Sell risk assets during the lag between Fed action and economic turnaround to avoid losses.
Labour Market Lags Economy
- The labour market typically lags economic downturns, delaying Fed response.
- The current recession probability is speculative; focus should be on market pricing and real data.