With inflation sitting at a four-decade high, stocks and bonds falling precipitously and yet to reach an apparent bottom, digital assets on the verge of an all-out crash because of some high-profile liquidations, the war in Ukraine continuing to rage on, and the U.S. Federal Reserve aggressively raising interest rates, this is one of the most difficult times in history for economic forecasters. Even Goldman Sachs’ President John Waldron admitted at a June 2 conference that this is “among—if not the most—complex, dynamic environments” that he’s ever experienced.
In our view, and currently being supported by the Atlanta Fed’s GDPNow Forecaster, the United States economy is contracting, and we are currently in a recession. We are seeing indicators across the board – from producers, manufacturers, consumers, and the broader financial markets – that are signaling to us that we are already in a recession. Therefore, unless the U.S. Federal Reserve decides to reverse their aggressive rate hiking plans or at least pause them for the time being, we will experience a hard landing, causing the equity markets to languish and the economic picture for most families to continue to deteriorate.
