Robert Heller, a former member of the Board of Governors of the Federal Reserve System, is warning that a double-dip recession could be coming. “…A double-dip recession is highly likely. The mild recession of the first half of 2022 may well be followed by a more severe recession in early 2023.” In other news, another high inflation report is expected this week. White House Press Secretary Karine Jean-Pierre said the Biden administration expects a high inflation number when the new Consumer Price Index (CPI) is released on Wednesday.


Barron’s/Robert Heller
This Recession May Be Mild. The Second One Will Be Worse.

The U.S. has now likely entered a recession, and the chances are good that this will be the first dip of a double-dip downturn—thereby repeating the experience of the early 1980s.

The most recent data published by the Bureau of Economic Analysis show that real gross domestic product decreased at an annual rate of 1.6% in the first quarter of this year. And the GDPNow data published by the Atlanta Fed peg the growth rate for the second quarter at a negative 1.9%. Many economists regard two quarters of negative growth as a recession, but it is up to the National Bureau of Economic Research to make the official call—which usually takes them quite a long time to accomplish.

A number of factors have contributed to the economic slowdown. Among them are the cessation of federal stimulus payments to individuals and corporations, as well as a significant slowdown in the construction and goods-producing industries.

However, Federal Reserve policy is still highly stimulative. The official Fed Funds Rate is now pegged at 1.50-1.75%, but the consumer-price index has risen by 8.6% over the last year, yielding a real or inflation-adjusted fed funds rate of approximately minus 7%. This is a highly stimulative fed funds rate by any measure. Similarly, longer-dated treasury bonds offer only negative rates of return in the neighborhood of minus 5%. If the policy of the Federal Reserve were truly restrictive, one would expect the fed funds rate and Treasury yield curve to be above the inflation rate.

Continue reading, here.


Kitco News
A 20-40% housing crash is coming, says investor who called crypto ‘The Tulip Mania of the 21st Century’ – Peter Grandich

Peter Grandich, who correctly predicted the crypto and stock market crashes, said that he expects a major correction in the real estate market in the United States. He suggested that the recent selloffs in crypto and equities would spill over into housing.

Grandich said that the goal, in this market, to “not try to lose a lot of money,” and warned that real estate “could see a 20, 30, or 40 percent loss and pretty fast.”

Grandich spoke with David Lin, Anchor and Producer at Kitco News.

You can read the full article, here.


Fox Business/Tyler Olson
White House downplays upcoming release of ‘elevated’ inflation numbers

White House press secretary Karine Jean-Pierre Monday said the administration expects a high inflation number when the new Consumer Price Index (CPI) is released Wednesday, but downplayed any fault of President Biden in the matter.

“On Wednesday, we have new CPI and inflation data, and we expect the headline number, which includes gas and food, to be highly elevated, mainly because gas prices were so elevated in June,” Jean-Pierre said. “Gas and food prices continue to be heavily impacted by the war in Ukraine.”

Jean-Pierre also called the data “backwards-looking” and “out of date,” noting that energy prices have come down from their peaks “and are expected to fall further.”

Keep reading, here.


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