Tuesday Topic: Are We Headed for a Recession?

The majority of key economic indicators to identify periods of inflation, recession, etc. are lagging indicators.  Real impacts of key economic indicators become reality long before they are reflected in the metrics.  Economists tend to rely on metrics or data that can be easily manipulated based on politics or other pressures.  It is time for reform for controls over economic metrics.  For example, are methodologies or changes thereto clearly disclosed for estimates used for key economic metrics (e.g. inflation, unemployment, etc.)?  Is there an independent audit or oversight processes for key economic metrics?

It is paramount to ensure information relied on to make decisions, policy, etc. is of high quality and free of bias, especially when metrics are derived from estimates.

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Matt Johnson
CFO
Premier Bank
Omaha, NE
Posts reflect my personal opinion and do not represent any organization in which I am affiliated.
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Original Message:
Sent: 03-21-2022 10:24
From: Barb Rehm
Subject: Tuesday Topic: Are We Headed for a Recession?

Expectations of higher interest rates-now a reality-have caused yields of short-term Treasuries to jump in recent months. Meanwhile, concerns over the effect of tighter monetary policy on the economy, Russia's war on Ukraine, and commodity shocks have led yields of longer-term government bonds to rise more slowly. A flattening or inverted yield curve is typically an indicator of a recession. But is that the case today? After all, the U.S. labor market has been strong, and wages have risen sharply. Morgan Stanley strategists argue a downturn is unlikely, while Goldman Sachs says the odds of one occurring in the next year are as high as 35%.

What's your take? How concerned are you about the slope of the yield curve?

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Barb Rehm
Senior Managing Director
IntraFi Network
Arlington VA
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