A recession is set to hit mid-2023, according to the continued decline of the Conference Board’s Leading Economic Index. This indicator, which tracks business cycles using inputs across factors such as manufacturing and unemployment, slipped again by 1.2% in March. “The Conference Board forecasts that economic weakness will intensify and spread more widely throughout the US economy over the coming months, leading to a recession starting in mid-2023,” said its senior manager of business cycle indicators. With the added pressure of the recent bank turmoil, the Fed’s fight to bring inflation down to 2% is becoming tougher as politicians favor easy-money policies: “It’s either big deficits to finance low taxes or big spending,” says economist Peter Morici. As for the dollar’s continued loss of power as a global reserve currency, economist James Rickards says we’re our own worst enemy. “We’re destroying the dollar with the sanctions (and through other misguided policies). The U.S. is doing more to destroy the dollar than our enemies,” writes Rickards.

Markets Insider/Phil Rosen
The US will tip into a recession in mid-2023, according to an indicator that’s declined for 12 consecutive months

The Conference Board’s Leading Economic Index for the US dropped for the 12th consecutive month in March, signaling that a recession is set to hit in the middle of 2023.

The indicator — which broadly tracks business cycles using 10 inputs from across manufacturing, unemployment, building permits, and interest rate spreads, among other factors — slipped 1.2% in March to 108.4, following a decline of 0.5% in February.

In the six-month span leading up to March, it fell 4.5%, a steeper drop than the 3.5% contraction from the preceding six-month stretch.

Continue reading, here.

MarketWatch/Peter Morici
Opinion: Powell and the Fed may be susceptible to the same mistakes that stoked inflation in the 1970s

U.S. Federal Reserve Chairman Jerome Powell faces a tough row to hoe fending off politicians who favor easy-money policies while maintaining the stability of the nation’s banking system and lowering U.S. inflation to 2%.

From 1979 to 2009, annual increases in the consumer price index averaged 4% vs. 1.8% in the 2010s. Now the U.S. may be reverting back to that prior norm.

The Fed’s path to controlling inflation is rocky. Supply bottlenecks for products as diverse as EV batteries and concrete and a slow-growing labor force will prove difficult to resolve. Climate change is instigating droughts and floods that reduce agricultural productivity and impair infrastructure. Any meaningful response will require costly investments in green energy production, electrical grids and fortifying coastal areas.

You can read the full article, here.

Daily Reckoning/James Rickards
Rickards: We’re Our Own Worst Enemy

It’s a fact of life that in any group of students, some are likely to be smarter and quicker than others while some just can’t keep up.

It’s unfortunate that Treasury Secretary Janet Yellen has turned out to be the slow kid in the class when it comes to economic sanctions and financial warfare.

Almost 10 years ago, I sat in a secure conference room at the Pentagon and explained to a group of U.S. national security officials from the military, CIA, Treasury and other agencies that the overuse of the U.S. dollar in financial warfare would eventually drive countries away from using dollars in international transactions for fear that they could become the next target of U.S. displeasure.

You can read the full article, here.

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