Recession watch: '...the risk of continued chaotic policy out of the White House is high'

[swag]

https://blogs.uoregon.edu/timduyfedwatch/2019/08/14/dont-panic-yet-2/

"Don’t Panic. Yet."

Tim Duy, Fed Watch

OK, well that was kind of a crazy day. Equities gave up yesterday’s gains and then some as bond yields dropped. The 30 year bond yield hit a record low and the 10s2s spread slightly inverted, stoking fears of recession. In my opinion we should be reasonably concerned about the outlook as recession risks have risen but recognize that a.) the time between yield curve inversion and and recession could be long and b.) the Fed has been and will continue to be more dovish in the wake of the inversion than they have been in the past. On the other hand, the risk of continued chaotic policy out of the White House is high and could foster the type of coordinated pessimism that overwhelms the Fed.

. . . much more at link

[kurtcagle]

1. I don't think it will be that long

You're already seeing weakness in retail sectors, housing markets are beginning to cool off except for the largest metro areas, both the PMI and Dry shipping are slipping into negative territory and the 10s2s is only confirming what had been a flat curve for a while. I think that we'll see weak positive growth for the next couple of quarters, with a disastrous Holiday season, and we'll be in confirmed recession territory by June 2020 after two consecutive quarters of "negative" growth.

[swag]

2. These things can come on quite fast.

[Wounded Bear]

3. I wouldn't call it a "risk" necessarily...

Certainty would be a more accurate descriptor IMNSHO.