To me the question is not whether the recession will happen but how deep will it go…. Historical data shows when the yield curves invert… well get ready for the fun.
What REALLY concerns me is stagflation.
I am only a realtor, (and an engineer) so my knowledge of economics and business cycles is rudimentary. I know the typical way to combat inflation is to tighten up the liquidity of cash in the economy, aka raise rates. This reduces demand which in terms bring prices down. I know this is a VERY inaccurate and oversimplified explanation but I am small brained…However when median incomes do not keep up with inflation, and you have runaway energy prices which leak into other standard measures that make up the CPI, (thus driving the true rate of inflation up), combined with a housing market that starts depreciating you can get into a real bad pickle.
What is the expected response of the FED in that scenario?
