Discussing Liquidity Climate Change on CNBC The Stealth Recession What if a recession began in October of last year and is ending? With the first revision of 1Q23 GDP, we also received the first estimate of 1Q23 gross domestic income at -2.3% following a 3.3% contraction in 4Q22. We consider GDI a better measure of the business cycle (see the link below from a former Fed staffer), particularly for investors. Income drives investment and consumption, not the BEA’s attempts to sum expenditures on goods and services. The two measures of growth should be equal over time, but given revisions and an ..read more

Is the Light at the End of the Tunnel a Train or a Productivity Boom? (BN) WILLIAMS: COVID PANDEMIC REDUCED LONG-TERM POTENTIAL OUTPUT (BN) WILLIAMS: NATURAL REAL INTEREST RATE ABOUT 0.5% IN 1Q The S&P 500 made a 2023 high this week amidst optimism about what the President calls a budget deal and the Speaker of the House characterizes as a debt ceiling deal, a distinction without a difference. To be sure, a slower growth rate for government spending, particularly unconstrained transfers to individuals, is disinflationary. In the short term, a deal will lead to increased Treasury issuance ..read more

This audio summarizes our May 13 note, The Fed's Trilemma Figure 8: The increase in the Richmond Fed’s natural model to 2% fits nicely with our view that the Fed balance sheet adjusted market implied inflation rate is closer to 3% than breakevens a bit above 2%. Barry C. Knapp Managing Partner Director of Research Ironsides Macroeconomics LLC 908-821-7584 bckn… Read more ..read more

There is a lot here this week, disinflation progress and the longer run outlook. The Fed’s trilemma in a 3% trend inflation regime, lessons from the S&L Crisis, the outlook for Treasuries, the yield curve and equities, as well as an update on the debt ceiling and budget negotiations. Gimme Shelter The disinflationary trend was further solidified by this week’s April CPI and PPI reports. The first stage of the move from 9% to 3-4% was driven by core goods prices as they declined from their February ‘22 peak of 12.4% to 1% in February ‘23. In April, core goods increased 0.57%, boosting the a ..read more

I am on the Host Committee for the 2023 Symposium on behalf of MacroMinds, which was founded by Dean Curnutt to bring the investment community together in support of causes that expand educational opportunities for students. I wanted to share the impressive agenda for the 3rd annual event, taking place on June 7th in NYC. It should be an excellent day of… Read more ..read more

Apologies for the delay in the note this week, it was unavoidable due to a busy travel schedule. Unfortunately, it may happen a few more times in the coming months. Doing Harm ‘It’s never different this time, but it’s never the same as the last time.’ “Banking conditions have broadly improved since March”, Chairman Powell The September ‘22 FOMC meeting, when the Fed hiked rates 75bp for the third consecutive time and increased their terminal rate forecast in the quarterly summary of economic projections 80bp, had wide-reaching effects. It destabilized exchange rates and exacerbated the energy ..read more

I am on the Host Committee for the 2023 Symposium on behalf of MacroMinds, which was founded by Dean Curnutt to bring the investment community together in support of causes that expand educational opportunities for students. I wanted to share the impressive agenda for the 3rd annual event, taking place on June 7th in NYC. It should be an excellent day of content and interaction as we support education.  Please reach out with any questions around attending or becoming a sponsor.  Here is my rant sitting in Andrew Ross Sorkin’s seat this morning… https://twitter.com/SquawkCNBC/status/1 ..read more

I am on the Host Committee for the 2023 Symposium on behalf of MacroMinds, which was founded by Dean Curnutt to bring the investment community together in support of causes that expand educational opportunities for students. I wanted to share the impressive agenda for the 3rd annual event, taking place on June 7th in NYC. It should be an excellent day of… Read more ..read more

I am on the Host Committee for the 2023 Symposium on behalf of MacroMinds, which was founded by Dean Curnutt to bring the investment community together in support of causes that expand educational opportunities for students. I wanted to share the impressive agenda for the 3rd annual event, taking place on June 7th in NYC. It should be an excellent day of content and interaction as we support education.  Please reach out with any questions around attending or becoming a sponsor.  Note: We will be in NYC for most of next week, other than Wednesday in Boston. Low Expectations BIDEN STIL ..read more

This audio summarizes our April 22 note, It’s What They Pay Figure 3: There have been three periods when debt and deficits were increasing, the ‘90s, ‘00s and ‘20s. All led to a budget battle. Barry C. Knapp Managing Partner Director of Research Ironsides Macroeconomics LLC 908-821-7584 bcknapp@ironsidesmacro.com https://www.linkedin.com/in/barry-c-knapp/ @barry… Read more ..read more