This article explains how investors are changing their outlook on the economy. In previous months people thought there would either be a "hard landing" where the US would enter a recession or a "soft landing" where the economy cools off and inflation rates and interest rates return to a regular level. However, now 36% of investors expect there to be "no landing" where the economy continues in the direction that it is going. One of the analyses said that the US economy does not enter recession for no reason, and right now there is no reason for demand to slow down leading to this no-landing scenario.
https://finance.yahoo.com/news/investors-increasingly-expect-no-landing-for-us-economy-123944030.html
4 comments:
This makes sense to me. I think it was described well in the movie, The Big Short, that people expect to see what they've been seeing recently. So if a basketball player makes a bunch of shots in a row, people expect them to make the next one too because they're on a roll, but in reality there's a higher chance of them missing the next shot. That is how I really look at this situation with investors looking at the US economy.
What factors do investors believe are driving this shift towards a "no landing" scenario, where the economy continues its current trajectory without a recession?
I'm curious, how are shifting expectations influencing investment decisions?
So what I'm hearing is that prices and wages will continue to rise with no foreseeable end, though not in tandem with each other.
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