QQQ - Stagflation Risks Fade But Recession Odds Rise

2024-06-24 12:01:02 ET

Summary

• Citi economic surprise index and Bloomberg economic growth surprise index sharply lower, potentially signaling stagflation or recession.
• The market suddenly thinks inflation has vanished after the May CPI report, but weak June data could prompt thoughts of a September rate cut.
• If inflation continues to cool as expected, it could lead to slower nominal GDP growth, potentially increasing recession odds.

A round of soft data has sent the Citi economic surprise index and the Bloomberg economic growth surprise index sharply lower. Both could be sending warnings that the economy has turned a corner and one that pushes it even closer to stagflation, or worse, recession....

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