3 Things - Is A Recession Coming?

2025-03-03 01:05:00 ET

Summary

• The Atlanta Fed revised their GDP Now estimate from +2.3% to -1.5%. That’s a reduction of 3.8%. It’s impossible to know the exact cause here, but the obvious guess is the tariffs, since the latest revision revolves primarily around import data and updated consumption data.
• One piece of confusion that I am seeing in many places is the idea that we’re currently undergoing or at risk of undergoing a stagflationary environment. Right now, we just have low growth with low inflation, even though inflation is still very modestly above the Fed’s 2% target.
• Is it possible that inflation could surge again? Sure. But it would have to surge by quite a lot from its current levels for this to qualify as anything remotely close to a stagflationary environment.

Originally published on February 28, 2025

Here are some things I think I am thinking about this weekend:

1) A Negative GDP Now Print!?!

It was a wild week in the markets, but the biggest news of the week dropped on Friday when the Atlanta Fed revised their GDP Now estimate from +2.3% to -1.5%. Yes, you read that correctly. Negative 1.5%. That’s a reduction of 3.8%. What in the world just happened?...

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