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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Jul 22 2015

Looming Fed Rate Hike and Recession Risks

During Congressional testimony last week, Fed Chair Janet Yellen provided further evidence that a Fed rate hike is forthcoming, saying: “If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target…” At the same time, she made it clear that the Fed “is not going to raise rates…if we think it’s going to tip the economy into a recession.”

This, of course, was said with an eye towards potential stock market reactions. In this context, our latest analysis provides answers about the current vulnerability of the U.S. economy to recession, as well as the cyclical risk of stock market corrections due to valuation concerns.

Related News & Events

Recoveries Remain Resilient

ECRI July 15, 2015

The big developed economies — especially in Europe — are not yet vulnerable to recessionary shocks. More

 

Low Trend Growth, Productivity Hopes, and the Outlook

Bloomberg July 1, 2015

How long-term growth trends in productivity and hours worked help explain the long-term decline in trend growth ECRI first identified in 2008, pre-Lehman. More

 

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