It is probably the most commonly used term in financial literature these days. The Russia-Ukraine war is causing a new surge of (energy) inflation. Meanwhile, unprecedented quantitative easing by the FED will make place for quantitative tightening in the coming quarters.
Over the past months, we already witnessed the first signs of weakening economic activity on consumers and businesses. Consumer sentiment reached its lowest level in over a decade as purchasing power falters. Company earnings guides during the fourth quarter of 2021 were the weakest in over five years as demand is falling off a cliff compared to previous expectations.
Last week, concerns regarding a potential recession intensified as the most accurate leading indicator for a recession sent an ultimate warning signal.
On Tuesday 2022/03/29, the 10 year minus 2 year treasury yield spread dropped below zero for the first time since August…