An Economy That Is Quickly Slowing
Hyman #Hyman
Darren415
Eyes are on the Fed again this week as the FOMC will announce their interest rate decision on Wednesday. Last month the Fed gave indications the magnitude of future rate increases would be lessened in order to evaluate the economic impact of earlier rate hikes. In an earlier post I touched on the fact the current tightening pace has been the steepest on record with the most recent hikes consisting of four consecutive 75-basis point increases in the Fed Funds target interest rate, or 0.75%. The market is anticipating a 50-basis point hike Wednesday. Below is a video of a recent interview with Ed Hyman conducted by Cosuelo Mack on WealthTrack and Ed believes the Fed should increase rates by just 25 basis points.
Ed Hyman has been voted the top economist on Wall Street by Institutional Investor for an unprecedented 42 years. Ed discusses his reasoning behind why he believes inflation has peaked, which would be welcome news to the Fed. In the video link near the end of this post, Ed Hyman notes:
Ed Hyman’s firm conducts a number of industry surveys, one being a trucking industry survey, and it is providing near recessionary level results. His reliance on trucking is due to the fact the industry has one of the highest correlations to GDP. Also showing weakness is shipping data as measured by the Baltic Dry Index (BDI) which measures global freight rates for dry bulk shippers. When global demand for shipping rises, the BDI rises as well. The BDI peaked in October of last year and has mostly been trending lower since, an indication of less demand for shipping as seen in the bottom half of the below chart.
Other factors cited in the interview as an indication the economy is slowing,
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Finally, Ed Hyman’s interview here provides one’s insight into 2023. It goes without saying though, the crystal ball is not always perfectly clear.
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