Moody's Analyst calls out Fed Monetary Policy (Inflation/Recession)

[pmbug]

... Mark Zandi, the chief economist at Moody’s Analytics, who said in a Twitter thread Sunday that he’d been asked “with regularity” whether it really mattered if the U.S. economy simply weakened or plunged into an official downturn.

“The answer is an emphatic YES,” Zandi said in a tweet.

“The recession debate is not a parlor game,” Zandi added. “There have been 12 recessions since WWII, lasting 10 months on average, with a peak-to-trough decline in real GDP of almost 3%, and given the current size of the labor force we would lose about 4 million jobs, pushing unemployment to 6%.”

The pain of that would be most acutely felt by low-income people, who could be set back years financially since their savings have dwindled, Zandi noted. Already, credit-card debt balances among lower-income people have surpassed their pre-pandemic levels.
...
“Once you get into a recession and things are going negative and we’re backtracking, it’s hard to know how that all plays out,” Zandi told MarketWatch. “Maybe it will be mild, but things start breaking when revenues start falling and businesses start going bankrupt and people start defaulting on their mortgages. Things can take a life of their own.”

‘The recession debate is not a parlor game’: A downturn would hit low-income people the hardest, says Moody’s Zandi

Mark Zandi, chief economist at Moody’s Analytics, says the Fed must 'be careful not to overdo the monetary tightening and push the economy into recession.'

www.marketwatch.com

 

[pmbug]

Not really a counterpoint, but some related issues on Fed Monetary criticism and context for Wall Street's lobbying:

In the third quarter, the drop in asset prices continued to reduce the biggest wealth disparity ever between the “Bottom 50%,” who gained a little wealth, and the very top households – the “Top 0.1%” and the “Remaining 1%” – who gave up some of their vast wealth for the third quarter in a row, according to the Fed’s data on the distribution of wealth by category of wealth.

In other words, the tightening by the Fed – the higher interest rates and the beginning of QT that the crybabies on Wall Street bewail on a daily basis – has undone a small portion of the horrendous wealth inequality that the prior years of QE and interest rate repression had caused.
...

Fed Tightening Reduces Horrendous Wealth Disparity that QE and Interest Rate Repression Have Wrought: Fed Data

The vast wealth of the top 1% households declined, the minuscule “wealth” of the bottom 50% increased a tad.

wolfstreet.com

 

[Voodoo]

Moody's is useless.