The On / Off US Recession
Is the US being resilient or is it about to collapse? We survey the scene
The chances were about 75% at the end of last year that growth would fall below zero for two consecutive quarters in 2023. That fell to about 40% in February as strong jobs data continued to encourage investors and economists. The Federal Reserve responded by increasing interest rates, even in the context of bank failures, in an attempt to slow inflation – down to 5.0% in March from a peak of 9.1% last June.
On 3 May, the Federal Reserve increased interest rates by 0.25% to a 16 year high of 5.0% to 5.25%. While confirming that the Fed’s mission is to manage inflation, Chairman Jerome Powell insisted that the US banking system, source of recent anxiety, is “sound and resilient.” However he admitted that he was unsure of the effects of this, the 10th rate rise in 14 months: “Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain.”
That statement doesn’t fill one with great confidence. His comments could be interpreted as, we are performing our task as per a narrow definition of that task, but we can’t be sure what the wider implications of our performance will be.
Read more here.
Shipping Markets Monthly
This Macro Macchiato note is a version of the macro report from our Shipping Markets Monthly which comes out in the first week of each month and covers the major freight, time charter and asset market stories, delivered with our macro contextual view and foward outlook. Our report is fully independent and unbiased.
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