“Prelude to Recession”: the Dallas Fed’s Unsettling Charts

Monday, February 22, 2016
By Paul Martin

by Wolf Richter
February 22, 2016

The “sharp cross-sector split.”

“The views expressed are those of the speaker and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System,” it says on the front page of the presentation. Institutional CYA. We get that.

Also let’s clarify upfront that Evan Koenig, Senior Vice President and Principal Policy Advisor at the Dallas Fed, did not forecast a recession. No Fed official, and no economist employed by any Fed entity, would ever publicly do that. For them, publicly, recessions exist only in the rearview mirror. For them, publicly, economic growth goes on forever.

Yet they know what’s going on. They have enormous resources at their fingertips. But by forecasting a recession publicly, they would deflate hype and sap economic confidence and could thus cause a recession – or a market crash. So no way. No recession warning from them, ever.

However, their concerns leave footprints in the economic muck, and this is one of them.

It appeared when Koenig spoke at a Dallas Fed event – “Finding Shelter: Assessing Texas Residential Real Estate amid the Oil Slump” – along with over a dozen other speakers. Koenig gave an update on the US economy and the “conflicting forces” pulling it in different directions. Overall, the economy would grow at 2%, so even below the uninspiring growth rate that has been dogging the US for years.

His logic unfolds in his presentation under the section, “The Fallout.” The collapse of the price of oil and the “soaring dollar” had the “expected impact on demand and its composition,” with some winners and losers:

The Rest…HERE

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