MΞMPH

Here's what I think happens next in the US economy: 1. Rates have peaked now, but no cuts expected. 2. More bank failures to be expected. 3. Unemployment rises to over 6% by EOY. 4. Inflation is persistently above 4% through the year. 5. Corporate earnings increase via layoffs. Here's the rub going into 2024: The Fed can't cut rates because of persistently high inflation. Once unemployment goes above 6% however, they're going to have to do something(?!). Whatever they do (QE, rate cuts, etc) will have no impact on unemployment numbers because companies will have replaced humans with AI wherever possible and existing employees will have become far more efficient at their jobs. The second and third order effects of my points above (on a global scale) are not priced into the market right now.