You don’t need to look far to see that the economy is going to hell.
So it should come as no surprise that the stock market, which plunged into a bear market earlier this week, fell sharply again Thursday.
The problem is that investors are like my tween daughter, wanting two contradictory things at the same time. For my daughter, it’s simultaneously “leave me the f**k alone” and “can you take me to my friend’s house?” For Wall Street, it’s, “Pretty please, Jay Powell, raise rates to gain control of runaway inflation” and “Stop! Higher rates are going to crash the economy into a recession.”
The tough medicine the Fed is giving the US economy magob y indeed kill the patient and start a recession. But, as Powell said Wednesday: “We have to restore price stability. We really do. It’s the bedrock of the economy, If you don’t have price stability, the economy won’t work…. Wages will be eaten up.”
So, what now?
At this point, economists…
