TO RECESSION OR NOT TO RECESSION
Heading into 2023, the markets were bracing for a widely expected recession. In hindsight, we all know that was not to be. So, will 2024 be the year we finally see a recession? Or will that ever-elusive soft landing be achieved?
Generally, we see a grinding expansion and moderating growth as the market stays relatively positive. Rather than a crash landing, we see the potential for a bumpy landing in which growth probably dips. Prior to the December Federal Open Market Committee (FOMC) meeting, there was a risk the Federal Reserve (Fed) could make a mistake with monetary policy, but Fed Chairman Powell seems cognizant of this concern.
One wild card to monitor is fiscal policy. We have been dealing with monetary policy restraint, but on the fiscal side, the U.S government is now running baseline trillion-dollar deficits, and oftentimes, the government spending aspect to gross domestic product (GDP) growth tends to get overlooked.
In terms of the economic indicators to keep an eye on, we and Professor Siegel, WisdomTree Senior Economist, will be scrutinizing labor market data, especially weekly jobless claims and productivity at the top of the list.
One wild card to monitor in 2024 is fiscal policy.
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