As the “are we or aren’t we in a recession” debate rages on, more experts are saying that a recession is coming soon. Michael Gapen, the head of U.S. economics at Bank of America, believes the Federal Reserve will unintentionally trigger a recession as it tries to tame inflation. “This cycle probably ends in a mild downturn,” he said. “How do I come to that? It’s basically just history. It’s really hard to achieve a soft landing.” In other news, Jordan Roy-Byrne of The Daily Gold Premium, has broken down the trends of past gold cycles to help figure out when gold prices will rise again.
Fox Business/Megan Henney
Bank of America chief economist sees high chance of mild recession this year
Is the U.S. economy on the cusp of a recession? According to Bank of America’s newest chief economist, the answer is yes.
Michael Gapen, the head of U.S. economics at Bank of America, told FOX Business that he expects the Federal Reserve to inadvertently trigger a downturn this year with its war on inflation.
“This cycle probably ends in a mild downturn,” Gapen said. “How do I come to that? It’s basically just history. It’s really hard to achieve a soft landing.”
Although Fed policymakers are counting on finding that elusive sweet spot – known as a soft landing – as they hike interest rates at the fastest pace in three decades, history shows that the U.S. central bank often struggles to successfully thread the needle between tightening policy and preserving economic growth.
Continue reading, here.
Understanding the Gold Cycle
Regular readers by now are familiar with Gold’s fundamental drivers and the influence of the stock market.
Falling and or negative real interest rates are the fundamental driver for gold and are usually a byproduct of a weak stock market and economic recession.
However, today I want to focus on the larger cycle for gold and at which points it performs and performs best. Secondly, perhaps more importantly, the gold cycle has major implications for the gold miners.
There have been three Gold cycles over the past few decades. Those were 2001 to 2007, 2008 to 2011, and 2018 to 2020.
The cycles revolve around bear markets in stocks and or recessions.
Keep reading, here.
CNN Business/Nicole Goodkind
Rate hikes and recession are still in the cards
There appears to be some confusion about the trajectory of prices in the US. That’s partially because month-over-month inflation eased in July while year-over-year, it remained near historic highs.
That raises an important question for consumers and investors alike: Is inflation peaking or not?
The answer, according to the market analysts, is probably. But there’s still a long way to go before we are where we want to be.
First of all, we need to remember that the ‘I’ in CPI and PPI stands for index. That means that shrinking inflation could come from prices falling in some sectors but not others. And that’s exactly what’s happening. Energy prices have dropped significantly over the last two months, dragging the top-line inflation numbers down along with them. But the costs of food, shelter and nearly every other commodity are increasing.
You can read the full article, here.