Chief Economist RSM. Board of advisors UCLA Anderson School Economic Forecast. Member Wall Street Journal forecast board. Named a top forecaster for 2023 & 2025 by Bloomberg. Dodgers fan
Joe Brusuelas
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A crisis that persists long enough, where all seven operate simultaneously, compound and reinforce one another, risks introducing a large negative feedback loop into the American economy and long term structural change. #Econ #EconSky
Good morning to $4 per gallon across the American economy.
American Demand Destruction: We identified seven channels through which this works. Demand destruction is a fluid process that impacts the economy with varying time lags. #Econ #EconSky
American Demand Destruction: The seven channels that compound to threaten US growth.
With the price of oil above $100 & gasoline above $4 per gallon look at the channels through which demand destruction works. #Econ #EconSky
Source: The Real Economy Blog
realeconomy.rsmus.com/american-dem...
The fast channels (gasoline costs, consumer confidence) hit within weeks. The slow channels (business investment, Federal Reserve policy, food inflation, semiconductor shortages) activate with modest lags.
#Econ #EconSky
Joe Brusuelas
Legitimacy sits at the heart of every enterprise whether it be a government, business or international institution.
A good way to squander that is via insider information, insider trading, collusion, graft or plain crony capitalism.
This is not sustainable.
In my estimation equities will continue to trade off yields going forward until we get clarity on the direction & duration of the war. #Econ #EconSky
Note the market is pricing in a 5.2% inflation rate using one year breakevens as my metric over the next year even as yields modestly decline today while a relief rally in equities is underway. #Econ #EconSky
The 4-6 week excursion looks more like 4-6 months at a minimum. It’s rational that global bond investors are pricing in risk of an economic slowdown.
Tension between higher inflation & higher yields vs slower growth, disinflation & lower yields has begun. #Econ #EconSky
The time of complacency across financial markets has come to an end.
Our @RSMUSLLP Financial Conditions Index implies a modest drag on growth as oil prices overnight surged into triple digit terrain in both Brent Crude & WTI. #Econ #EconSky
realeconomy.rsmus.com/market-minut...
Joe Brusuelas
Joe Brusuelas
Joe Brusuelas
Joe Brusuelas
Demand destruction—the process by which high prices force consumers and businesses to cut spending—unfolds through seven distinct channels on different timescales.
