Monetary Matters with Jack Farley Equity Market Strength is Masking a Recession | Mike Green
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Jun 18, 2025 Mike Green, Portfolio Manager and Chief Strategist at Simplify, dives into the paradox of a strong equity market potentially hiding economic weakness. He discusses the implications of rising interest rates, how they're affecting consumer behavior, and hints at an upcoming recession due to labor market challenges. Green offers insights on the passive investing endgame driving equities higher and speculates on how asset values might fare in a recession. He also touches on inflation, the bond market, and the gig economy's impact on unemployment.
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Fed's Rate Hikes Enrich Wealthy
- Fed rate hikes shifted income towards the wealthy, supporting a strong high-end consumer.
- Signs of fatigue appear as leisure and travel spending slow amid stagnant incomes.
No 2008-like Credit Collapse
- Unlike 2008, the banking system remains stable with no credit access cutoff yet.
- Rising delinquencies and job growth slowdown signal a gradual credit tightening, not a sudden collapse.
2000s Market Analog, Not 2008
- The current economy resembles 2000's overvalued market without a triggering shock yet.
- High yields issuance is weak, pushing investors to choose yield or accept tighter credit spreads.