A Contrarian View On The Next Recession Consistent With Historical Precedent

Two of the most heavily-debated topics over the last month are: 1) the Fed tightening into what certainly looks like a deflationary spiral, and 2) plunging crude prices. Clearly, the latter could well exacerbate the disinflationary impulse, thus raising the chances that the Fed has made a policy mistake. Ostensibly, the argument for hiking now (if you're the Fed) is to preempt a scenario wherein the overheating labor market ends up translating into sharply higher realized inflation down the ro