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Recession Set To Start Earlier Than Consensus Expects? (2/2)

US

The bottom line: the Conference Board eyes a recession starting around end-2022, lasting through mid-2023.

  • That's an earlier start (and end) than eyed by consensus which mostly sees a (mild) recession beginning mid-to-late 2023.
  • The 6-month annualized change in the LEI is flashing up warning signals: the chart below shows the current rate of change (-6.3%) as the x-axis; this has historically been a reliable recession signal, with no "false positives".
  • An earlier recession would -at the very least - call into question whether the terminal rate can get to 5% by mid-2023 as is currently priced in.

Source: Conference Board, NBER

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The bottom line: the Conference Board eyes a recession starting around end-2022, lasting through mid-2023.

  • That's an earlier start (and end) than eyed by consensus which mostly sees a (mild) recession beginning mid-to-late 2023.
  • The 6-month annualized change in the LEI is flashing up warning signals: the chart below shows the current rate of change (-6.3%) as the x-axis; this has historically been a reliable recession signal, with no "false positives".
  • An earlier recession would -at the very least - call into question whether the terminal rate can get to 5% by mid-2023 as is currently priced in.

Source: Conference Board, NBER