By now you guys must have guessed that I am always a bit skeptical about whatever is published in certain areas, above all by people whose objective seems to be to sensationalize things more than to inform in an attempt to call your attention for their product. Although the Fed traditionally has been showing an inclination to keep things going at any cost, everything is now about to collapse but you may be able to survive by paying for our expertise in raising red flags, seems to be what they are saying.
When faced with such type of rhetoric it always pays to go in search of other sources of info.
"Leading Indicators Suggest Economy Will Keep Growing While slowing, the economy is expected to maintain a healthy growth in 2022."
By Tim Smart|Jan. 21, 2022, at 10:32 a.m
A forward-looking gauge of the economy’s health rose 0.8% in December, the Conference Board reported on Friday.The organization’s Leading Economic Index now stands at 120.8, following a 0.7% increase in November. The move is consistent with many reports that foresee steady, if slower, growth ahead for the economy.
“The U.S. LEI ended 2021 on a rising trajectory, suggesting the economy will continue to expand well into the spring,” said Ataman Ozyildirim, senior director of economic research at The Conference Board. “For the first quarter, headwinds from the Omicron variant, labor shortages, and inflationary pressures – as well as the Federal Reserve’s expected interest rate hikes – may moderate economic growth.”
“The Conference Board forecasts GDP growth for Q1 2022 to slow to a relatively healthy 2.2% percent (annualized),” he added. “Still, for all of 2022, we forecast the US economy will expand by a robust 3.5 percent – well above the pre-pandemic trend growth.”
After a blistering pace of growth in 2021, economists expect a downshift for the economy this year as it grapples with labor and supply shortages and rampant inflation. The Federal Reserve has indicated it will combat rising prices with higher interest rates, with the first increase expected in March.The omicron variant of the coronavirus has thrown a monkey wrench into some economic data, but the highly transmissible virus is beginning to recede somewhat.
The labor and supply shortages, however, may take longer to return to pre-pandemic levels.Already, markets are reacting to a world of slower growth and a more hawkish Fed, with tech stocks in particular selling off broadly in recent days. Stalwarts Netflix and Peloton, which prospered during the pandemic as people stayed home, have been among the hardest hit of the market’s high flyers, shedding 20% and 24% respectively on Thursday.“I think the volatility is playing out as expected,” says Gene Goldman, chief investment manager at Cetera Investment Management. Goldman says the changed environment will likely favor value stocks over tech and financials."
