The last five economic recessions were all preceded by a spike in crude oil prices. Does that mean we should worry about yesterday’s historic jump in the price of oil? In a word, no.
Author: Matt Kerkhoff
I want to start off today with a chart that shows exactly why you shouldn’t trust most economists – at least those with ulterior motives. This chart also helps demonstrate the importance of crowd psychology across both the financial markets and the broader economy.
It’s September, and guess what that means? New Tariffs! Woohoo!
What, you’re not excited about more tariffs? You don’t want to pay more for goods and see a further dampening effect on economic growth? You actually want the economy to keep growing? Well, too bad for you.
The main idea I want to talk about today is the notion that our economy will continue to expand (no recession) as long as consumer spending remains healthy and continues to grow. This is the primary case being made by those who are watching business spending deteriorate, but who don’t believe we’ll enter a recession.
The fickle and herd-like nature of the financial markets is on clear display right now, as conversations about the yield curve again take center stage. Last week, the 10-year note yield momentarily dipped below that of the 2-year yield (it did not close below that mark) and this has set off a frenzy of commentary that in my opinion, is completely misplaced.