Northwestern Mutual’s Post

As we dive into the second half of the year, expect the economy to pump the brakes, with slower growth and easing inflation. The Fed's 'long and variable lags' will keep a lid on growth as real interest rates rise. Watch for potential rate cuts starting in September and keep an eye on CPI—its decline could signal a more confident path to lower inflation. Stay tuned; the economic landscape is shifting! #EconomicUpdate #InflationWatch #FedMoves https://lnkd.in/eumwU359

December 15, 2023 The Year Ahead – 2024 Looking ahead to 2024 the economy should largely shrug off the remaining impact of high interest rates and not slip into recession. Inflation should continue to trend lower but its rate of descent will be less pronounced than in this past year. It is unlikely to reach the Fed’s 2% target until sometime in 2025. With inflation continuously shrinking, the Fed will switch gears and let rates start to decline sometime in the summer. By the end of next year we suspect the current 5.5% funds rate will have declined to 4.75% and will continue its descent in 2025. This is a world with moderate growth, inflation steadily shrinking, and interest rates beginning an extended period of descent. What’s not to like? The Fed may actually achieve the often elusive soft landing. Typically when the Fed lifts rates both sharply and quickly the end result is a disaster. But not this time. The upcoming year seems merry and bright. To read the entire article go to: https://lnkd.in/eArd56te

Fed’s Powell warns forecasts must be flexible amid ‘dynamic’ economy .The Federal Reserve kept its key short-term interest rate unchanged Wednesday for a second straight time but left the door open to further rate hikes if inflation pressures should accelerate in the months ahead.Inflation definitely go up.Money printed by central banks in covid -19 time still in the market after tight monetary policy.It will definitely spike the inflation pressure because investor digest the 5.50% interest rate interest go higher and longer if market not carsh next market carsh coming in 2026-2027 because fed will be pivot 2026-2027.Market correction came last month 10% in S&P 500 because bonds and yields surging now bonds and yields go down and so market react again in positive mood it means inflation pressure come back now i said last time unemployment will rose from 3.4% to 3.9%.we will see higher and longer if the fed cut the rate early inflation go like 1970 and face stagflation,hyperinflation and higher unemployment.

We made it to Wednesday so it's time for my midweek market update... Economic data from the Bureau of Economic Analysis has proven that inflation continues to drop towards the FED's long-term goal of 2.0%. The PCE (Personal Consumption Expenditures) showed that core goods grew at 2.3% over the third quarter, down from the initial reading of 2.4%, while the US Economy grew at an annualized rate of 5.2% over the third quarter, revised from the initial estimate of 4.9% that was released a month ago. Overall, the market measured by the S&P 500 has increased 8.92% at the time of this writing and is close to breaking out of its all time high. As new economic data continues to be released, this will lay the outlook of the overall market, but for now, the FED seems to be dovish and most likely will remain this way going into the New Year. Read more here...

GDP growth outperforms at 3.3%, challenging recession worries and nearing Fed's 2% inflation goal. Dive into how consumer dynamics, corporate actions, and easing inflation are overturning the experts' predictions. https://innmb.com/4bcRq9Y

Some good news: the overall decline in the rate of inflation, the strength of recent readings on the health of the economy, and the prospect that the Fed is done raising rates has led economists to lower the probability of a recession within the next year from 54% on average in July to 48%, according to the WSJ’s latest quarterly economic forecasting survey, conducted earlier this month. 82% of economists survey felt that the current target range of 5.25% to 5.5% for the Fed Funds Rate is restrictive enough to bring inflation down to the Fed’s 2% goal over the next few years.  

I am not an economist and here is my 2 cents... It seems like this survey should come with a tag line like the investment funds... " past performance does not guarantee future results". I agree with KC the Fed will keep rates up and that is the issue. Business failure rates are up, which means businesses are struggling to pay rent. More vacancy stress for CRE dealing with interest rate issues. This will hurt CRE values and further stress banks and lending. An even tighter credit environment is less than ideal for struggling small businesses, which I believe are running out of reserves and will begin to fail at even greater rates (confirmed by local BK attorneys). I am seeing a lot of local businesses close and a slowdown in restaurant traffic is evident. At least the past two generations and perhaps mine, do not believe in delayed gratification. This conclusion is supported by record consumer debt that is accumulating interest a much higher rates than 2 years ago. Pandemic savings are gone. I have never seen " a people" more stressed than at this point in time. Something is coming...

Jeff Cox, CNBC. The slowing growth and stubborn inflation in the U.S. economy may not be a nightmare scenario for the Federal Reserve, but it presents challenges. The first quarter showed a GDP growth of 1.6%, the slowest in nearly two years, alongside high inflation rates. Economic experts believe this creates a mildly stagflationary environment that complicates policymaking. Despite a solid economic performance defying conventional expectations, the combination of weakening growth and persistent inflation has led to market adjustments, reducing expectations for Federal Reserve rate cuts. Some analysts suggest the Fed might still consider rate cuts later in the year if growth continues to falter and inflation indicators weaken. However, others advise the Fed to maintain its current stance, as the overall growth story remains positive, despite some sectors showing weakness. #useconomy #stagflation #federalreserve #gdpgrowth #inflationconcerns #economicdata #marketadjustments #ratecuts #economicoutlook #monetarypolicy #fiscalpolicy #consumerspending #economicforecast #sloweconomicgrowth #highinflation #financialmarkets #treasuryyields #centralbankpolicies #usgdp #economictrends

Reality updates... M2, inflation & economy update   https://lnkd.in/ehMeXUDs Perception is not reality. Data is. The Fed has done its job, and the economy is heading back towards normal growth. "The all-important M2 money supply continues to come back into line with long-term trends, key inflation measures are very close to the Fed's target, and money demand is returning to pre-Covid levels. The service sector (dominated by housing-related costs) is the only area of the economy suffering from above-average inflation at this time, but this should gradually subside over the next 6-9 months. Memo to Fed: you can start reducing short-term interest rates anytime, and the sooner the better". #economicoutlook #federalreserve #interestrate