US Economic News

[BlueKelah]

Its not the Fed's call if a recession is announced, it is another think tank they need to classify it as recession before it is one.

Fed's agency task is to manage inflation and employment

National Bureau of Economic Research is that think tank. and they can have a big lag before calling recession. 

For example fed rates went to 5.25% in july 2006 and held it there till September 2007. they had to start dropping it to 2% over the following year due to increasing unemployment and GDP going negative in 1q2008 and GFC hit in october. It was not until DEC 2008 that the NBER declared a recession. So you can see how useless it is to wait for them to define a recession. Obviously they knew a recession was there since the GDP went negative at the start of 2008 but didnt admit it till the GFC hit in october, and then they took another 2 months before announcing. 

So this round i expect maybe 3rd Q gdp negative then possibly another GFC hit and NBER will then have no choice but to say oh USA is in recession after the elections.

Also comapring to GFC, this round it only took a couple months for FED to scale down QE in November 2021 onwards and already the GDP went negative, of course made worse by the war and sanctions but those were after 1Q2022. Now with QT plus big rate rises, something will break eventually even with all the liquidity sloshing around.