What’s worth highlighting when nothing’s worth highlighting?

That’s a question I grapple with during long stretches of relative market inactivity, otherwise known as “holidays.”

To be sure, I can carry on in virtual perpetuity about life — my capacity to editorialize at length about existential matters knows no bounds. (You’d think that’d make me a great candidate for rewarding interpersonal relationships. But you’d be wrong.)

Much as I enjoy whisking readers away into the realm of pretentious metaphysical introspection, I have enough respect for your sanity to recognize the editorial imperative of keeping the discussion at least semi-relevant to matters of macro and market concern. That sometimes entails pretending to care about soundbites of questionable significance, particularly on days when no one’s around to say anything that’s actually significant.

That brings me to Kristalina Georgieva, and a lengthy interview with CBS’s “Face The Nation.” There’s a sense in which we should all care what the director of the world’s foremost multilateral economic institution has to say about the outlook for the global economy in the new year. But that’s the paradox (and the irony) of IMF projections: Virtually no one cares, despite the fact that the Fund’s forecasts are, in one way or another, built into lending deliberations and other decisions with the potential to make or break entire economies.

“How do you describe the state of US economics and politics?” Margaret Brennan wondered. Georgieva was diplomatic while alluding to the fraught state of America’s fractious democracy. “Decision making in the US because of the way the political set is at the moment — it is more difficult,” she said, citing the child tax credit as evidence that good outcomes are possible despite deep divisions. “It expired,” Brennan responded, flatly.

Georgieva then mentioned the bipartisan infrastructure bill and the misnamed “Inflation Reduction Act.” “These are things that are bringing more dynamism in the US,” she said, noting that what’s good for the American economy is generally good for the rest of the world. “Staying on that course is going to be more challenging, but I do hope that the US is not going to slip into recession despite all these risks,” she added.

Effectively, Georgieva suggested that the fate of the global economy in 2023 hangs on the US labor market. “We expect one third of the world to be in recession [and] even in countries that are not in recession, it would feel like recession for hundreds of millions of people,” she lamented. “But if [the] resilience of the labor market in the US holds, the US would help the world to get through a very difficult year.”

Here again, we confront the uncomfortable reality of conflicting priorities. The resilience of the US labor market is a factor in keeping inflation elevated in the US. The Fed can talk around it all they want, but the cold, hard reality is that monetary policy as it stood heading into 2023 (and as it’s likely to stand at least through the first quarter) is aimed squarely at rebalancing the jobs market. The Fed insists that can be accomplished mostly by way of fewer job openings as opposed to job losses. But one way or another, it has to be accomplished, lest millions of unfilled positions should lead to never-ending competition for workers and the persistence of wage growth well above levels compatible with 2% inflation.

The world needs a sturdy US labor market. The Fed needs a less sturdy US labor market, although policymakers will insist that a balanced jobs market isn’t just consistent with sturdiness, but in fact synonymous with it to the extent unsustainably high wage growth makes for an inherently unstable situation.

On some days, I think a soft landing might still be possible in the US, if certainly not for Europe and if not for locales where rate hikes imperil outright property manias (“mania” as distinct from America’s relatively tame property “bubble”). Other times, though, the contradictions are simply too myriad, the narrative too inconsistent.

Georgieva underscored that latter point. “This is going to be a tough year because the three big economies — the US, EU and China — are all slowing down simultaneously,” she cautioned, adding that,

The US is most resilient. The US may avoid recession. We see the labor market remaining quite strong. This is, however, [a] mixed blessing because if the labor market is very strong, the Fed may have to keep interest rates tighter for longer to bring inflation down. Our big worry is that with the economy slowing down globally… central banks [will] get cold feet and say, ‘Oh, my God, growth is slowing down, let’s slow down the fight against inflation.’ We then risk inflation [being] more persistent. So, our message to central banks is: You have to see a credible decline in inflation and only then you can think about recalibrating.

That’s a difficult, and likely impossible, balancing act. And, as discussed here on Monday morning, divided government and partisan rancor in the US are very likely to stand in the way of a fiscal response to a prospective US recession.

Perhaps China can take up the slack if the dramatic downturn that appears to have accompanied the lifting of COVID controls in December eventually reverses course. It’s possible, I suppose, that a combination of herd immunity and stimulus will power the world’s second-largest economy to an above-consensus performance in the new year. We’ll see. Europe, I’d gently suggest, is a lost cause economically, but hopefully not militarily.

The IMF expects the global economy to grow 2.7% in 2023, down from 3.2% in 2022 and 6% in 2021. 2.7% would be the slowest pace in 22 years if you don’t count the pandemic or the financial crisis. Again: I’d suggest that estimate, bad as it is, may prove too rosy.