Stagflation is indicated by two economic conditions: Decelerating Q1 GDP Report and persistent inflationary effects
Let’s also realize that the economy is decelerating in its headline number despite all that services and government hiring we’ve been noting month after month. Although government hiring is not productive hiring so it stands to reason that it would not move the GDP needle to the degree that free market hiring would. Click Headline, get article:
I’ve noted the culprit that makes this a stagflationary, albeit economically corrosive and counter-cyclical report as opposed to a disinflationary counter-cyclical report.
The stock market was already cracking as of last night when recent leader META soiled itself at earnings. This morning the pressure continues, and just maybe another leader will have signaled the next leg of the correction after the anticipated (in NFTRH last weekend) bounce to the underside of various 50 day averages for the indexes.
Treasury yields are rising again, so my anticipation of a bottom for TLT at the 62% Fib is out the window. But my theory has been that a substantial stock market correction is needed – and possibly desired by fiscal and monetary policymakers – to drive inflation signaling down. I’ll stick with that for now.
It’s a process, this rotating, churning, groaning, grunting and wringing macro.
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“this rotating, churning, groaning, grunting and wringing macro”–a nicely descriptive and deft turn of phrase, Gary.