The Clock Strikes: What Yesterday’s Rate Hike Tells Us About the Old 18-Year ...

[Pallas_Boreas]

Summary

• A seemingly routine Federal Reserve rate hike may be far more significant than it first appears, occurring at a point in the economic cycle that has historically preceded major turning points.
• The article tests the current economy against the 18-year property and credit cycle, comparing today's conditions with the peaks and downturns of 1980, 1990, 2000, and 2007.
• Several late-cycle warning signs are now flashing simultaneously, including rapid credit expansion, rising debt-servicing pressures, a re-steepening yield curve, slowing profit growth, and weakening housing activity.
• Yet one important difference remains: unlike the peaks of 2000 and 2007, the private sector's overall balance sheet remains comparatively healthy, leaving open the question of whether this cycle ends in a mild wobble or a deeper downturn.

Link: https://alanlongbon.substack.com/p/the-clock-strikes-what-yesterdays