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The National Bureau of Economic Research (NBER)’s authoritative Business Cycle Dating Committee itself uses a two-part classification – “expansion” and “contraction”. Growth in business activity tends to accelerate and decelerate; outright declines in the level of activity are relatively rare. UNDECLARED RECESSIONSThe NBER’s Business Cycle Dating Committee formally declared only six recessions between 1980 and the end of 2020. They were periods of little or no growth in an otherwise uninterrupted business cycle expansion and tend to be forgotten. Mid-cycle slowdowns also reset the economy by easing capacity constraints and relieving upward pressure on prices and wages.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe Fed is going to continue to be data dependent, says NBER Chair John LipskyNBER Chair John Lipsky, joins 'Closing Bell' to discuss Fed Chair Jerome Powell's monetary policy moves going forward, Fed funds futures markets and potential signs of weakness in the jobs report.
Billionaire hedge fund manager Paul Tudor Jones believes the U.S. economy is either near or already in the middle of a recession as the Federal Reserve rushed to tamp down soaring inflation with aggressive rate hikes. "I don't know whether it started now or it started two months ago," Jones said Monday on CNBC's "Squawk Box" when asked about recession risks. "The stock market is down, say, 10%. The first thing that will happen is short rates will stop going up and start going down before the stock market actually bottoms." Jones shot to fame after he predicted and profited from the 1987 stock market crash.
This unfortunate situation the Fed is in — damned if you do, and damned if you don't — is illustrative of a deeper issue. Many politicians, companies and households risk thinking of the Fed as part of the problem and not part of the solution. And it is the latter, currently at 6.3%, that measures the breadth and likely persistence of inflation. But it was not until the end of November of last year that the Fed stopped assuring us, repeatedly, that inflation was "transitory." Just a few months ago, it was still pumping liquidity into the economy while inflation was rising fast.
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