The various prognosticators trying to see over the horizon by jumping up and down on their statistical trampolines will not get the official word for another three months. But without housing employment, the US would have been in at best a stagcession over the past three years. Now there is no housing employment, and the consumer spending derived from home equity is gone.Inflation is guaranteed by the bidding up of commodity prices and the flip side, the falling dollar. Very likely the Fed will panic again, this time to the upside. The same matrons screaming at their husbands during the credit crunch will be screaming just as loud for rate hikes when they see their dollars eroded by the very cut they demanded in the first place.
(Beware, I have learned my lesson, and I'm not calling for a precipitous drop in the dollar that would be indicated by the fundamentals, just the current slide. There are plenty of players with powerful positions who will do all they can to stem the tide. They may be successful for as long as eighteen months.)
Be that as it may. Tomorrow's Forecast Index on the web site will be a review of the past, in a probably futile effort to gain credibility by showing we've been right before. But I did want to get in ahead of the pack, or most of the pack, on this one.
Recession and Inflation
Crisis will be deepened by Fed action.