We May Already Be in Recession...

The unemployment rate rose to 4.3%, and 10-year Treasury yield briefly broke below 3.8%. The Sahm Rule has been officially triggered.

The underemployment rate, or U6, rose to 7.8%.

Last night, Intel announced a 15% layoff to be executed by year-end. So you can add another ~18,000 unemployed in Q3/Q4 of this year. There are more layoffs coming as companies look for ways to make lofty Street earnings expectations in the second half of 2024. Meanwhile, consumer-oriented companies are suddenly talking more cautiously about their customers.

The reason is real simple: They ran out of cash a long time ago, have been running up credit card bills, and now are worried about their job status.

The Fed's next meeting is Sept 17th. That's an ETERNITY, unless they move between meetings (which would be viewed badly if they do).

Treasuries have been telling us lately that something is wrong with the economy. Recession is on the way, and the Fed missed the memo...again.

Unfortunately, the impacts of all of this mess in the financial markets will affect the election in November.

The readers of Matt's Macro Matters and my other posts are well aware that I have been predicting for many months now a recession and a 15-20% peak-to-trough correction in the S&P 500 in 2024.

This has been a completely out-of-consensus call. It is seemingly more real now. We will see. Buckle up...