Steno Signals #62 - The recession is called off (by consensus)

The “no-landing” camp is getting increasingly crowded and even if we do not rule such a scenario out, we find that the probability of outcomes is starting to favor a more conservative approach to risk

Happy Sunday and welcome to our flagship editorial!

The most pre-announced recession in human history is still yet to arrive and I don’t think it’s possible to find a period in time where the economist consensus has been continuously on the bearish side of actual outcomes, outside of the one we have just been through.

From a soft landing to a hard landing to NO landing. That has been the pattern for economic projections both in Q4-2022 and Q1 to Q4-2023. Finally, the recession has been called off in the economic consensus as BBG consensus is now in >0% territory for all quarters ahead. Even Jay Powell sounded puzzled about the above-trend growth projections for Q3-2023.

This may be the exact reason why you should start fearing the recession again.

Chart 1: The recession has been called off by the consensus now