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REPLAY | DE | Quarterly | GDP Conference Call | The Economy—Can the Good Times Last? – 4/28/2022
The Economy—Can the Good Times Last?
First Report—Q1 GDP
(April 28, 2022)
• “Boomy Expansion”—In Q1?—Will It Continue?
o Q1 Real GDP and Inflation—Still “Superstrong” and “Red Hot?” Or “Cooling”?
o GDP—How Strong? Weak? Strengths and Weaknesses
o Q2 and Beyond “Basic Prospect”
• Macro Prospect and Macro Risks—“Boomy Expansion” (65% Odds); “Boomy Expansion-Recession” (10% Odds); “Boom-Bust?” (10% Odds); Fed and Consensus “Soft Landing” (15%)
• Upswing Status (25 Months Now)—Stages are Recovery, Expansion, Boom, Crunch or Financial Crisis, Recession
o Recovery—Q2 2020 to Q1 2021 (Past Previous Peak Real GDP)—Typically 1 – 3 Years—One Year This Episode
o Expansion—Q2 2021-to-Present—Typically 2-to-4 Years—This Time?
o Boom a Late Expansion Characteristic—Strong Economy; Accelerating Inflation; Tight and Fully Employed Labor Market
o Soft Landing?
• “Red Hot” Inflation—Process and Prospect—When the Peak? How Long High?
• Fed and FOMC Meeting (May 3 – 4)
o Huge Policy Error
o Overshooting and Catching-Up
o Fed Policy Tightening Pivot—Quick and Pronounced—Federal Funds and Balance Sheet Quantitative Tightening (QT)
• Fed Messages and Themes—The New Backdrop
• Financial Market Prospects—Interest Rates Central
o Equity Market Correction Still
o Currencies and Dollar Strength
• Asset Allocation Perspectives