Banks are Bracing for a Recession as Treasury Yields Surge

I think I stated at the beginning, I don’t care if we were in a recession in 2022.
But to ignore the fact this has been a loose definition extolled by numerous experts in a variety of settings (including one of the foremost business channels) is just cognitive dissonance.
I guess the reason you don’t like that criteria as a marker of a recession is then you would have to admit that under Biden we had a brief recession. (Who cares really)
The lengths people will go to prop up that empty suit are only surpassed by the lengths some continue to go to support Trump.

 

It's got nothing to do with Biden. I'm just fascinated by you guys who can't admit that 2 quarters of negative GDP growth isn't necessarily a recession. And the flipside is that just 1 quarter of neg GDP growth can be classified as a recession. Why is it so important to you? It's like you're insisting that 6 points has to be a touchdown. It can't possibly be 2 field goals instead. It's just bizarre.

 

I remember the 2022 recession. Was really hard for all those people who got jobs and raises.

 

The great recession of 2022. We only added 2.6 million jobs during that recession. It was bad.

 

Trump was at 13% 3 years into his term ... Biden is at 16%.

 

And I’m fascinated by the fact that despite numerous sources saying it’s used as a lose definition by many, and it’s literally quoted weekly on the leading business channel by their experts you act like it totally is meaningless and some made up metric.

 

Motley Crue says a recession is a comin'. Money supply (M2) is shrinking, which hasn't happened since the Great Depression in 1933, apparently. Bad times are ahead, so they say. Supply M1 is the amount in checking accounts plus cash in circulation. M2 equals M1 plus savings accounts, money market accounts, and CD's (below $100k). Maybe people had a lot of money in CD's worth $90-99k last year, and now they are worth more than $100k. Maybe not. Predictions include double-digit unemployment, but no Great Depression (government officials understand a little better what NOT to do in a recession).

Hopefully, the recession doesn't hit until after the election. As unqualified as Harris probably is to deal with a recession, Trump is almost certainly guaranteed to be a hundred times worse. More accurately, the democrats that will be advising Harris will be a hundred times more capable than the real estate goons, shady lawyers, and professional ass-kissers that Trump would have advising him.

U.S. Money Supply Has Done Something So Remarkable That It Hasn't Occurred Since the Great Depression -- and a Big Move in Stocks May Follow

 

I assume you mean The Motley Fool and not the band Motley Crue?

 

I thought the band would give it some street cred.

 

I would say that it does make sense that a recession is possible, if not likely, based on the fact that China (the world's second largest economy) is in the crapper economically, Germany is sliding into recession, and the U.S. is probably due for a recession, after all the trillions in Covid spending that was not sustainable. I know that money has gotten tight at my company, and another company I work with has already had layoffs (along with reduced spending).

 

Hard to follow all these articles. For example, in Feb 2024, Yahoo posted a M2 story that discusses M2 decline. Then Barron’s had a story about an increase in M2. Then this article. So…what is the entire concern about a $800b decline in M2 when it’s at $20T. There is something like $500b in reverse repos in Jan and now it appears to be like $300b (will look more). I don’t believe there is a liquidity problem and money is still flowing, but the current level of short term parking is disturbing.

 

We’ve had recession threads every year since 2019. I starting to think no one has any idea what will happen in the future.

 

Yields are still inverted, not as much as before, but inverted. If this rate cut thing was a lock as everyone except me states, the inversion will have been reversed with the falling treasury rates and mortgage rates.

We don't have recessionary indexes popping up yet. That doesn't mean the Feds won't be foolish and cut into an economy in equilibrium causing a return to higher inflationary conditions, you know the mandate they ignored for 9 months before cutting and now may ignore again for, well, you state the reasons.

 

Tommy Lee has been beating that drum for a long time. He says inflation will climb back up to Sixx %.

 

The 2-year yield is down approx 50 basis points over the last 30 days. The 1-year is down 40 and the 6-month is down about 30. What happens if there is no cut this month?

 

Yep and there's a certain person that has been telling us a recession is coming every other month for several years now

 

Agree plus it was a signal he shouldn't have sent with it being a knee jerk reaction to the 818,000 historic jobs reduction revision. With such poor governmental records and revisions, he put too much emphasis on one piece of data that could be revised again.

The Fed was in a wait and see hold through August jobs report/unemployment rate, CPI, and PPI. He should have said the decision will be made at the September Fed Reserve meetings on 9/17 and 9/18.

Now, Powell has painted the Fed into a box that some of the federal reserve bank governors may not agree with if the index values don't come in signaling a rate cut. The July PCE actually went up slightly and remained steady, not dropping as he said previously that he wants to see, in the Core PCE for a 3rd month in a row.

The jobs report/unemployment rate will be out this coming Friday, the CPI and PPI will be out on the following Wednesday and Thursday. Bottom line, there was no need to rush to the fire of prematurely stating it is time to change the rate policy.

The mortgage interest rate markets have adjusted based on Powell's comments. Smart buyers should be out locking the lowest mortgage rates since mid-2023.