Historically, it has taken an average of around two and a half years after the Fed’s initial rate hike for a recession to commence. Those long and variable lags are still in play. It would be unwise, however, to sound the all-clear on the global growth outlook. China is bouncing back following the easing of COVID-19 lockdowns. Consumers in both regions are benefitting from falling energy prices, job gains and improving real incomes. and Europe, but there are also fundamental factors at play. The unusually warm winter has boosted economic data in the U.S. The energy shock from the Russia/Ukraine war was supposed to send Europe into recession over the northern winter, but growth has remained positive. Federal Reserve (Fed) since the early 1980s, yet payroll gains have averaged 407,000 over the first two months of this year and consumer spending growth is running close to trend.Įuropean and Chinese growth have also surprised positively. We have seen the most aggressive tightening by the U.S. Economist Milton Friedman famously noted “that monetary actions affect economic conditions only after a lag that is both long and variable." 1 The current cycle is following this maxim.
0 kommentar(er)
