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SHW's avatar

Thank you for your posts. I find your reasoning clear and insightful, and I appreciate you citing the data sources, which helps me follow up. (And thank you for explaining nuances in various data series!)

Toward the end of this post you write, "The 2018 scenario is one in which the Fed reacts early to deteriorating financial and economic conditions and swiftly reverses course on its policy outlook." Do the Fed and US government have less room to adjust policy today compared to in 2018? In particular, do current high inflation and low real interest rates force the Fed's hand to continue monetary tightening, more or less regardless of how the real economy responds, until inflation comes down to "reasonable" rates? Is there justified concern that historically high levels of national debt, globally, will interact with inflation, especially as central banks raise interest rates?

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MankiwsMom's avatar

I think this is the best post in a while about the current state of the economy, just because we are comparing the data now with the data during / right before past recessions. Even though every recession is different, how useful an indicator is seems to be determined by how well it actually indicates for past, similar recessions.

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