Experts argue that the Fed can’t achieve its goal of reducing inflation without triggering a recession. Since 1960, every recession except the pandemic-induced downturn of 2020 has kicked off with inflation running at 3.7% or hotter. And only in 1974 did the recession end with inflation higher than 2.7%. In other news, George Milling-Stanley, the chief gold strategist at State Street Global Advisors, told Kitco News that he expects gold prices to take off once the recession hits in 2023. “I think for the first half of the year, gold will be in a wait-and-see mode, and that is going to moderate demand. I do see opportunities where it pokes its head above $1,800 an ounce. The world is waiting for signs to see what kind of recession we will get. And, unfortunately, they will have to wait a little bit longer…I don’t think there is any way the U.S. economy avoids slower growth in 2023, and that will impact U.S. monetary policy. If we do get a recession, gold will take off.”

Yahoo Finance/Jared Blikre
History says the Fed can’t meet its inflation goal without a recession: Morning Brief

Forget about a soft landing in 2023.

Should the Fed achieve its goal of reducing inflation, it’s all but guaranteeing a punishing recession next year caused by a rapidly deteriorating labor market.

As Yahoo Finance’s Myles Udland laid out in Thursday’s Morning Brief, Fed Chair Powell strained credulity at his latest press conference while attempting to make the case for a potential soft landing next year that sees inflation come down without the economy contracting.

Powell struggled to fit the FOMC’s own predictions about the economy next year into a narrative that avoids a hard landing — or recession.

You can read the full story, here.

Kitco News/Neils Christensen
Gold prices to hold around $1,800, but will take off if a recession hits in 2023 – State Street’s Milling-Stanley

Gold prices have dropped below $1,800 an ounce after Federal Reserve Chair Jerome Powell signaled that the U.S. central bank is expected to keep interest rates aggressively high through 2023.

However, one market strategist said that rising interest rates will be less of a headwind for gold as the U.S. dollar benefits less from a hawkish Federal Reserve. In an interview with Kitco News, George Milling-Stanley, chief gold strategist at State Street Global Advisors, said that growing recession fears are starting to outweigh the U.S. central bank’s aggressive monetary policy stance.

The comments come a day after the Federal Reserve signaled that it is nowhere near finished raising interest rates. In its updated economic projections, the Federal Reserve sees interest rates peaking at 5.1% in 2023.

You can read the full story, here.

Fox Business/Ernie Sadashige
Bonds give recession signals

Companies with top credit ratings are returning to the bond market to bolster their cash stockpiles while fretting over persistent inflation and sluggish economic growth. That’s giving investors a chance to buy the safest bonds at stepped-up yields due to rising interest rates.
Warren Buffett’s Berkshire Hathaway announced a 115 billion yen ($842 million) bond offering this month while Duke Energy is out with a $1 billion offering. Amazon sold $8.25 billion of bonds in November.

“Bond markets in general have begun to behave in a recession-signaling way,” market expert Adam Kobeissi told FOX Business. “For the first time all year, we are seeing bond prices up significantly while stocks fall, and this comes just one month after tech layoffs began.”

Read the full story, here.

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