| 10 soft landing vibes |
| 1. The US labor market is rebalancing. 2. Fed is approaching terminal rate and will be pausing soon. 3. Overheating and wage-price acceleration is off the table. 4. US recession probability is lower than people think. 5. Corporate earnings collapse is less likely than people think. 6. US consumer and corporate balance sheets remain strong. 7. Global inflation pressure has peaked, and sentiment will bottom. 8. Soft (sentiment) data could be overstating economic weakness due to the nature of diffusion indexes and the way they can overshoot when cycles are extremely fast. 9. High nominal inflation is bad for sentiment but good for nominal growth. This is part of the reason for the massive wedge between soft and hard data. 10. The US is in a much better position than most countries because so much froth and leverage was released in 2008. Froth and leverage remain abundant and interest sensitivity remains high in places like Canada, the UK, etc. (Spectra) |
