The inversion of the bond yield and the trade war with China have investors believing the we are approaching a recession in the U.S. But economist claim the numbers for recession are not adding up. Consumer strength continues to keep the economy strong even while manufacturing slows. Consumers account for 2/3 of the U.S. economy. We also have the Federal Reserve pressured by markets to lower interest rates and further stimulate the economy.
Quote:
Chris Rupkey, MUFG’s chief financial economist, said the bond market is not reflecting reality but fear brought on by the U.S.-China trade wars.
Fear and uncertainty have investors retreating stocks. This may be good for markets in the long-run if assets were beginning to outrun the economy.
Growth forecasts are rising and economy looks nowhere near as bad as bond market predicts