A recession is coming. Maybe.

That was one tentative message from America’s largest banks, where executives put aside more for losses and adopted a relatively cautious cadence on the outlook for the world’s largest economy while editorializing around fourth quarter results released on Friday.

To be sure, the message wasn’t doom and gloom. Although JPMorgan and Bank of America expect a downturn, they don’t anticipate a deep recession, and Citi’s Mark Mason described a soft landing as “very manageable.” Mason doesn’t see anything especially nefarious on the horizon in terms of consumer credit, even as provisions at the house of Fraser amounted to $1.8 billion, more than expected.

Larry Summers, meanwhile, showed up on Bloomberg TV to deliver his weekly dose of downbeat prognosticating. “One has to be careful of false dawns,” he told David Westin. “I would stick with my view that a recession this year is more likely than not.” He went on: “If you think about it, the good news was inflation running in the 6s, and that’s still inconceivably high.”

Summers did allow for some optimism, but his remarks were a bit disingenuous to my mind. The good news wasn’t the headline YoY inflation prints from December. The good news from the CPI report was the in-line MoM core reading and the absence of any land mines buried in the details, notwithstanding another month of harrowing shelter prints that virtually everyone views as stale.

On Friday, the preliminary read on University of Michigan sentiment suggested consumers felt quite a bit better about things as the calendar flipped. At 64.6, the headline print beat every estimate from 52 people like Summers. The current conditions index rose almost 10 points, and year-ahead inflation expectations dropped to just 4%, the lowest since April of 2021.

The five-year reading ticked higher to 3%, but it’s been stuck in a narrow range for months. The relatively benign one-year print was consistent with the New York Fed survey, which offered another bit of incrementally good news this week.

“Current assessments of personal finances surged 16% on the basis of higher incomes and easing inflation,” survey director Joanne Hsu said Friday. “Although the short-run economic outlook fell modestly from December, the long-run outlook rose 7% to its highest level in nine months.”

Although I described BofA’s commentary from the bank’s Q4 call as “somewhat ominous,” I’d be remiss not to point out that all of the above seems to at least nod in the direction of a benign resolution to the most vexing macro conjuncture in recent memory. Caution abounds, but there’s a conspicuous absence of overtly dour news. And evidence in support of moderating inflation is piling up.

While Summers is correct to warn on false dawns, “one” also “has to be careful” (to use Larry’s words) of not talking in circles, which I’m guilty of myself at times. Currently, we’re in the maddening habit of pitching all good news on the inflation front as nascent bad news because it’s likely to i) engender a counterproductive rally in risk assets, ii) embolden consumers at a time when the Fed needs Americans to retrench or iii) both.

There’s merit in all of those arguments, but either we want inflation to cool or we don’t, and on some days it seems like we don’t. “Today’s University of Michigan report suggested that relief on inflation could keep consumer demand strong,” Bloomberg’s Alyce Andres said Friday. “The Fed probably won’t like it.” She continued (abridged):

Consumers voiced fewer concerns over gas and food prices during the early January period, had a more favorable view on their personal finances [and] worried less about further rate hikes. That’s all very bullish for consumer spending. It could be that prices have come down enough to spark buying on things like cars, houses and major household items. That’s just the thing that the Fed does not want to hear.

I should be clear: She’s right. All of that’s true. But, again, this sort of logic feels forced during some sessions.

Consumers are struggling with inflation, the bane of Main Street’s existence, but when inflation begins to recede, and consumers start feeling better, we jeer because the stage is purportedly set for more spending, which might keep inflation elevated in perpetuity.

Markets are struggling with tighter policy, the bane of Wall Street’s existence, but when the incoming data suggests policymakers are finally having some success, we jeer because the read-through of rallies for the wealth effect could be inflationary.

There are countless examples of that never-ending, circular quest to spin today’s disinflation as tomorrow’s inflation.

Obviously, nobody wants to “prematurely” declare victory in the battle to coax the inflation genie back into the lamp. But ceaselessly scolding Main Street and Wall Street for daring to smile at incremental evidence of progress is to promote a kind of despondent apathy. And not because that’s what’s needed to slay the dragon. Rather, because that’s what’s needed to meet today’s “news” quota.