Lead-Lag Live

Lakshman Achuthan on Economic Cycle Insights, Yield Curve Un-inversion, and Global Manufacturing Challenges

Jan 5, 2025

Lakshman Achuthan, a veteran business cycle analyst from the Economic Cycle Research Institute, dives into the complexities of economic cycles, discussing their inherent cyclical nature. He unpacks the recent un-inversion of the yield curve and what it signals about the current economic landscape. The conversation also highlights the challenges facing global manufacturing amid a slowdown and the implications of past policies. Achuthan emphasizes the importance of adapting to evolving data and staying informed to navigate economic fluctuations.

37:28

Episode guests

Lakshman Achuthan

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Episode notes

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Quick takeaways

Economic cycles consisting of growth, inflation, and employment are interconnected but can deviate, resulting in unique recession triggers.

The current economy shows resilience in certain sectors despite challenges, highlighting a 'K-shaped' recovery where opportunities vary across industries.

Deep dives

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Intro

4min

Rethinking Recessions: Economic Cycles and Challenges

10min

Understanding Economic Indicators and Their Implications

4min

Navigating the Struggles of Global Manufacturing Amid Economic Cycles

3min

Navigating Economic Cycles

12min

Understanding Economic Cycles for Personal and Investment Decisions

5min

Join us for an insightful conversation with Lakshman Achuthan from the Economic Cycle Research Institute (ECRI), where we promise you'll gain a deeper understanding of the complex world of economic cycles. Lakshman, a veteran in business cycle analysis, shares his expertise on the intricate dance between growth, inflation, and employment, and how these cycles, though interconnected, often march to the beat of their own drums. Our discussion highlights why economies are inherently cyclical, buffeted by internal dynamics and external shocks, and how recessions often arise when these weaknesses coincide with unforeseen events. The episode also delves into the current economic climate, dissecting phenomena such as the recent un-inversion of the yield curve, providing insights into where we are in the economic cycle and what this might mean for the future.

This episode also takes a closer look at the economic landscape shaped by policies from the Trump administration, examining the structural impacts on employment and broader economic trends. We reflect on how historical patterns and unexpected downturns, like the 2018 inflation gauge surprise, pose challenges for economic forecasting. The global manufacturing sector's struggles amid a prolonged slowdown is another focal point, with discussions on potential recovery sparks and the implications on inflation and economic growth. Lakshman emphasizes the importance of staying open to evolving data and trends, highlighting the disparities between the resilient U.S. service sector and the cyclical nature of manufacturing. Tune in to explore the significance of forward-looking indicators and how they can provide a roadmap for anticipating changes in the economic landscape.

The content in this program is for informational purposes only. You should not construe any information or other material as investment, financial, tax, or other advice. The views expressed by the participants are solely their own. A participant may have taken or recommended any investment position discussed, but may close such position or alter its recommendation at any time without notice. Nothing contained in this program constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in any jurisdiction. Please consult your own investment or financial advisor for advice related to all investment decisions.

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