Current financial knowledge is Fed’s ‘worst nightmare’, economist says

A top Wall Street economist warns that the economy is looking pretty bad and that won’t make the Federal Reserve’s job any easier as it tries to create an economic landing. soft economy, a leading Wall Street economist warned.

“I would say that recent economic data has been central banks’ worst nightmare,” said Citi Chief Global Economist. Nathan Sheets on Yahoo Finance Live (video above). “On the one hand, I’d say there’s very strong evidence of a slowdown in global demand. And on the other hand, there’s also strong evidence that inflationary pressures are present. You just put that together. put together, it’s hard for the banking center to resist that.”

General economy readings paint a picture of a slowing US economy stuck with high inflation.

The sun rises over New York City during a solar eclipse on June 10, 2021 as seen from The Edge observatory at The Hudson Yards.  (Photo by Noam Galai / Getty Images)

The sun rises over New York City during a solar eclipse on June 10, 2021 as seen from The Edge observatory at The Hudson Yards. (Photo by Noam Galai / Getty Images)

The Bureau of Economic Analysis (BEA) said in the end that week second quarter GDP fell by 0.9% as consumers and businesses reduce their spending due to rising prices of goods and services. This marked the second consecutive quarter of economic contraction after GDP in the first quarter fell 1.6%.

The contraction of the economy hot talk that the United States is in recession.

“I wouldn’t be surprised if they [NBER] really pushed the beginning of the recession to the end of last year,” Chief Economist Dreyfus Mellon Vincent Reinhart speaking on Yahoo Finance Live. “So we’re probably going to be one of the longer recessions on record.”

During the past month, investors also received Big profit warning from big name retailers such as Target, Walmart and Best Buy as consumers battle through rising gas, food, and rent prices. These warnings about material returns are an unwelcome sign of consumer spending decisions.

The bottom line: The Conference Board’s consumer confidence index has fallen for three straight months, stocks remain in a bear market, and major players from Tesla to Meta to Amazon are all down. recruitment announcement pullbacks.

And on top of that, the June Consumer Price Index saw its biggest gain since November 1982 at 9.1%.

Despite the economic slowdown, The Federal Reserve made that clear in its most recent meeting it will move forward with more rate hikes this year to stave off inflation. On the contrary, Sheets added, that could lead to rising unemployment while the economy slows but inflation also remains elevated for a while.

“There is now a sense that we are going through a period of temporary stagnation in inflation,” Sheets said.

Brian Sozzi is a great editor and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and more LinkedIn.

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