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‘Fed Cuts Versus Recession’: The Next Battle
Where to from here?
"Recession! That's where." Or so goes the refrain from seemingly everyone inclined to weigh in on the macro trajectory at a time when the market-implied odds of a US downturn exceed 50%.
Of course, calling recessions isn't an exact science. Even the yield curve's purportedly perfect track record relies heavily on a rather malleable interpretation of the term "prescience." The lags between inversion and downturns are "long and variable," to employ the obvious joke.
As a rel
In my perfect world view, we’d get one more 25bp raise, no cuts in 2023 and the 30yr @5% (a proper place for the risk of duration of that size), the 10s @ 4% and the 2s at 3.5%. Stay there for the few years I probably have left and I’d be in investment heaven.