Name: The Fed Doesn’t Think the U.S. Is Headed for a Recession
Uploaded: 2016-07-07
Duration: 5 min 52 s
Description: The Fed Doesn’t Think the U.S. Is Headed for a Recession

Deutsch Bank coming out this week saying there's now a 60 % chance that there's a recession in 2017 in the US. The New York Fed say there's only an eight percent chance. So Ann whose more credible? Deutsch Bank or the New York Fed. So I mean I've got to go with the New York Fed. Deutsch Bank the last two recessions have been using this metric. Deutsch Bank had a 70 % chance. So I don't think we're in Even if you were looking at Deutsche Bank I don't think we're in the red quite yet. So I would go to Deutsche Bank! [ LAUGH ] Listen! I think the fed, I know we're not into flop or fly yet, but I think, I think the fed's talking it's book, right? The fed doesn't want a recession, Right. Well the fed come out and says there's a 60 % chance of recession. You know, all heck is going to break loose, right? So the fed is stalking its book it wants its people, not wants, but I mean generally, listen its not cutting interest rates. If the fed really saw a 6 % chance of a recessional hire, hopefully they would be cutting interest rates. So clearly the fed thinks the recession is unlikely. Right, and lets be honest, like the fed, not just New York but is terrible track record of predicting this economy. I dont know about Deutsch Bank specifically but I think the question is this has been a slow sluggish recovery. A lot of people think we never got out of recession after 2008. Is there anything new here? Is there anything that Dolce Magazine. Is is the Brexit vote that's changing them to say, wait a minute, something's changed here that maybe the odds recession are rising in America. Right with the sheet. But, their model looks [ INAUDIBLE ] where people have placed in their bets and what they're saying is that more and more people are placing their bets on long term bonds and that's a kind of thing you buy when you're really scared, right. And so, that's what they're seeing in Brexit and the market Took a big at the beginning of the year but then recovered. And things seemed like they're okay when you look at the stock market. But what they're saying is when you look at the bond market which is a pretty good indicator. People are still running for safety and people are scared. Right and so meanwhile tomorrow we get the jobs number which is the next big known event. Known known for financial markets. And we could be having a very different conversation if it's a hot [ UNKNOWN ] number, no one's gonna be talking about recession. And any forecasts from you Anne about what we're gonna see tomorrow? I think it's gonna be a lot better, you have the Verizon strike impacting the really terrible numbers last month. So I think it's gonna be much better than what we've seen before, they did revise the past numbers down a little bit So it's high stakes. [ INAUDIBLE ] number is the mother of all economic reports. It's the most important [ INAUDIBLE ] number of the year. Right so I, once again I'm going to disagree I think you're wrong. I think that it is the tendency of economists so last month we had a very big disappointment. It's a tendency of economists to predict reversion to the mean. Right. They're expecting that we're gonna come back to 200, 000. I think that that is just what they do. They expect, we had a bad month, we're gonna have a good month. And I don't think they're actually looking at it. So I think- [ CROSSTALK ] I'm taking the way under. We have two, ADP report was good. ADP report came in above expectations. It was good, but that- Not the worst predictor. Right, it's not the best predictor But the other thing that we had is that we had a mild summer. And that pulled Jobs forward. And I think that's going to continue to effect and lower jobs throughout the summer. Alright, I love the debate. Save it for flop or fly which we'll get to in a second. But we are also here with Rafael Garcia, our social video guru. He's taking questions from Facebook. Rafael, any questions about anything we've discussed so far? Yes! I want to tell everybody on Facebook to comment in the comment section below. Share your thoughts, your question. I'll be taking the question and tell them, too, you guys, we are seeing that people are starting to like the video, like for example Herman Lee and Julie Carraway, who was one of the first people to like us on Facebook, and we have a question from From Lesindo Shen, and she asks, are there any economic indicators that suggest that the US economy will be just over the next 12 months, or any reason to feel even bullish about Where the economy is going considering all the Brexit presidential election uncertainty. That is a good question, right. So there's so much talk about the negativity, what can go wrong? What can go right? What gives you Mister Frownyface, what gives you optimism about the US economy here? Well, I mean, I think that Brexit makes it harder for the Fed to raise interest rates. And I think that was a concern for a while, that we'd have a rising interest rate environment where the economy is. Kind of weak. So I think if the Fed's on hold, that's generally pretty good. It's slow lending growth, but certain companies and individuals are still borrowing. I think we had a record refinance rate recently or something. So I think the lending markets seem good, and that's usually good for the economy. All right. And you edit the macro section of the magazine. So what makes you optimistic about the US economy? I think there are a lot of reasons you see, I don't know, maybe corporate profits are down but even stocks are pretty strong. The economy has been growing for years. It's- Yeah. We're going on seven plus years now. The P of the stock market is a pretty good indicator. It's relatively high. Usually you don't see recessions where people are paying this much for stocks. Yes. But again in a bad market, rates are very low. So The relative valuations. It's a disconnect, and the market's not efficient. Yes, the market's not efficient, Elon Musk. Raphael, we have any other questions on Facebook? Yeah, we're on more questions about the recession. For example Rodolfo Sosa Garcia says, when exactly did we get out of a recession? That is a great question because I was talking with our producer before we came in here that there have been polls. Polls consistently, that a lot of Americans, at some point some majority of Americans feel that we've never gotten out of recession in the first place. So officially when did we get out of rescission? December two thousand and nine. December two thousand and nine. So we're approaching seven years of official recovery, and yet a lot of people don't feel it, which is why I think that something like a dutch bag saying sixty percent of recession. It resonates with people because they feel like this economy is never really been on strong ground since the crisis. I think we've had a wage growth recession, right? Right. That's continued through out the way. It's been the wageless recovery and I think the average person doesn't see in their bank account their paycheck and so you feel like you're still in recession. Right. And so, again, this brings us to tomorrow's jobs number You know, we're all gonna look at the headline number payroll growth, and what the employment rate is but wages up or down, that could be the real indicator for the Fed, for sure. [ BLANK_AUDIO ]

The Fed Doesn’t Think the U.S. Is Headed for a Recession