Corporate CEOs can’t stop talking about the possibility of a coming recession.
They have been behaving like kids with a new toy, focusing on it as though it’s the most fascinating thing in the world. Except that the new toy is monstrously scary.
CEOs have been yapping about the likelihood of recession during earnings calls, even when they haven’t been asked.
A Q&A might go something like this: “You got any exciting new products in the pipeline?”
“Well, speaking of the possibility of a coming recession …”
There may, in fact, be a recession on the horizon. But this is not at all a certainty. With the Federal Reserve having put four super-sized rate hikes on the books, the central bank has been doing its part to get on the job after having been asleep at the switch for far too long when the economy began really heating up.
The Fed is trying to achieve the near impossible feat of slowing the economy sufficiently to tamp down inflation without at the same time piling on the brakes so hard that we skid into recession.
Is this possible? Sure, in theory. But it’s a bit like trying to thread a needle while piloting a speeding motorcycle through a driving rainstorm. At night.
Still, Fed Chairman Jerome Powell hasn’t given up all hope. He recently said there remains a window for executing a soft landing. “Has it narrowed? Yes,” he said. “Is it still possible? Yes.”
Not the safest of bets, perhaps, but not an impossibility.
The current situation cannot be compared to anything that anyone has seen before. There’ve been plenty of economic downturns over the years, but never one quite like this one. With the jobless rate as low as anyone can remember. Yet still jobs aplenty. And inflation to beat the band But maybe, just maybe, not as far as the eye can see.
For quite some time, when interest rates seemed to be stuck at zero forever, lots of folks crowed about the new rules in our new economy. And it almost seemed real — until it all came crashing down, of course.
But still, we’d never before shuttered businesses and issued stay-at-home orders. And turning things off is much easier than getting them running again.
Happy days aren’t surely coming soon, but if you squint, you can perhaps imagine them in the distance.
