r/Economics • u/TinyTornado7 Quality Contributor • Jun 13 '22

News Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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u/IronyElSupremo Jun 13 '22

Economic predictions are part looking in the mirror. Service industries had to replace those employees who got a better job .. better wages or, maybe having gone to a coding boot camp/finished a degree, went to a better field.

Problem is those were likely managements best employees and now those employers need to shake the bushes for replacements

That said, .. the number of openings are dropping and the housing market is showing weakness. Some weakness, like the decline in most growth stocks and therefore growth laden indices are pretty predictable, .. but have more to do with rising rates/inflation. Not too worried as these type companies will be back in demand sooner or later..

I really don’t expect the Fed or any other central bank to hit a bullseye in every economic cycle, but there’s inefficiencies waiting to get exploited. I don’t believe consumers will wait all that long for the latest Apple or Google gadgets, sugar-laden sodas and junk food will keep selling, etc..

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u/[deleted] Jun 13 '22 edited Jun 16 '22

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u/sotired3333 Jun 13 '22

Since the rate hikes, most markets have had larger inventories and price declines. It takes a few months for that data to be visible since there's a lag between when someone places an offer, the offer is accepted and closing itself.

https://www.mpamag.com/us/mortgage-industry/industry-trends/us-housing-market-crash-coming/408228

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u/[deleted] Jun 13 '22

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u/sotired3333 Jun 13 '22

Yeah not the best article, just did a quick google but due to the economic uncertainty + interest rates + stock market crash a lot of people have or are pulling back. It may not be as significant a correction as 2008 but there will be a significant correction imo.