Will recession slam the stock market? What investors need to know as the Fed pilots the economy into a slowdown

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Here's what investors need to know as economists, investors and policy makers debate whether the Federal Reserve can avoid tipping the economy into a recession.

You don’t have to be an economist to run the Federal Reserve. But a pilot’s license might come in handy.

The debate is whether the economy will suffer a recessionary “hard landing,” slamming into the ground and causing substantial damage, or a “soft landing,” in which the economy gently comes back to earth and taxis to the terminal. Those well-worn terms have been used for decades to describe Fed-induced economic downturns.

The LEI is a gauge of 10 indicators designed to show whether the economy is getting better or worse. The index fell 0.3% in January after a 0.8% fall in December. Economist David Rosenberg, founder of Rosenberg Research & Associates, calls the LEI “a 100% ironclad recession forecaster.” “It is tough to have a recession with the unemployment rate at its lowest in a half-century. If the economy is to avoid recession, employment will be the key,” wrote Quinlan and Seery.

No landing In a no landing scenario, the economy averts recession altogether. A still-hot labor market and a healthy consumer are seen providing the fuel that allows the economy to grow and potentially accelerate. And while activity in the manufacturing sector may be contracting, the services sector, which accounts for around 80% of the economy, is still going strong.

 

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michaelsantoli dampedspring ukarlewitz How all we love to put costume to Jerome Powell 😀 If he comes in costume to each fed meeting and charge for the show, we could pay our national debt

The market won’t crash while we are flying the ballon …

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