No recession imminent for "2022" Red dots indicate drops prior to recession, Grey bars illustrate recessionary periods

If we are heading for an imminent recession, why are credit card and mortage delinquencies historically low?

If we are heading for an imminent recession, why is bank lending picking up.?

If we are heading for a recession yields would be plummeting not rising. Banks buy treasuries before as they know the recession is coming. Red dots illustrate this.

With import prices unchanged, ten-year stabilizing and base effects on upcoming CPI prints. Market participants come back from cash.

Elon and Jamie where is your data? As you can see a recession is usually proceeded by a drop in corporate profits. Here we have the opposite. We also have excellent housing starts, low credit card and mortage delinquencies. No recession imminent for 2022.

Monetary policy is only one factor that determines recessionary environment. Demographics and Fiscal often matter more. Monetary policy is also slow

Demographics remains the largest cross current in the macro landscape. Japan had the third largest covid stimulus among G-7 nations and is a major commodity importer. Yet expectations are for 2.1 CPI in May. It was 2.4 in April. What the west would give for that!

Still no signs of imminent recession, Goldilocks Jobs report, Bank Lending trending up while delinquency rates are going down.

Mild Recession most likely scenario for 1st half 2023 Only 7 months into tightening cycle and were already seeing: housing starts down three out last four months. Weekly jobless at 240,000 (three month high) Record yield curve inversion.

With the BOJ letting rates rise. Christine Lagarde/ECB recent hawkish comments we could see a big change in interest rate differentials with the dollar dropping in the DXY. This combined with China's reopening and structural supply issue make 2023 a big year for commodities.

As you see by the table on left foreigners dumping treasuries has not contributed to the recent rise in yields nor has inflations exceptions as evidenced by 10 -year breakeven (inflation expectations gauge. It primarily due to too much issuance/supply.

10-year break even (inflation expectation gauge) relevantly flat not culprit for recent rise in yields. Treasuries are like paper towels absorption has its limits. 🤣

While market participants pay great attention to demand destruction when the fed raises rates little attention is given to the supply destruction. Mines are not built to changes to NPV valuations and IRR. Apartment buildings are not built due to deteriorating. cap rates.

CPI increasing sequentially monthly recent breakout in commodities not yet factored in !

If the federal budget deficit is 6.5% of GDP and we cut by two trillion dollars. The economy would contract and tax receipts would fall off. We would effectively be robbing Peter to pay Paul. Right now, if core inflation is 4% and economic growth is 3% and the ten year is 4.4%

You are effectively deleveraging existing debt. The strengthen this dynamic we negative real yields. Negative real interest rates are the friend of debtor, and the biggest of all Uncle Sam!