Taps Coogan – December 2nd, 2022

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Another day, another reminder that a recession, not even higher inflation inflation, is the big problem the economy is hurtling towards. The following chart, from Saxo Bank’s Ole S Hansen, highlights how global container freight costs are plunging back towards pre-Covid levels.

The fact that container rates are returning to normalized levels is a good thing for supply chains and consumers. The problem is that the Fed and other central banks are using terribly lagging inflation metrics and thus still slamming on the monetary brakes.

This isn’t the 1970s and our stagnating and aging labor force, ultra-high debt levels, and increasing sclerotic financial/regulatory system cannot handle double or triple rate hikes every month ad infinitum and $95 billion of QT.

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