Taps Coogan – November 30th, 2023

The Fed’s famous ‘Beige Book‘ economic activity index has dipped into contractionary territory for the first time since the Covid lockdown recession in 2020. Win Smart:

This doesn't look good 👇 pic.twitter.com/cdNxu5cImV

— Win Smart, CFA (@WinfieldSmart) November 30, 2023

Lots of people have been calling for a recession for the last couple years and lots of indicators have suggested that we’re either headed for one or already in one. Add this one to that list.

We’ve covered lots of those forecasts and indicators here at The Sounding Line while often reiterating our personal view that we are instead in ‘purgatory:’ a long period of time with pre-recessionary conditions that has people constantly worrying about a recession, but doesn’t actually deliver the goods.

We continue to think that that ‘purgatory’ model is the right one even though it’s already been a couple years as such. We assume that this eventually ends in recession, and that means we’re getting closer to that eventuality, however there is likely still enough time on the clock that the distinction isn’t trivial.