Commentary Consumer confidence has plummeted already. With gasoline and food prices weighing on far more than American sentiment, it’s no wonder much of the public may have come around to the idea of recession. Politicians and economists are another matter. Nothing in life—let alone the economy—is inevitable, but the entire global system may have passed that point of no return some time ago before anyone (outside of markets) had realized it.
Treasury yields and eurodollar curves have been forecasting contraction not inflation for well over a year already. Starting out as small relative probabilities, as longer-term yields buckled and the eurodollar curve distorted, this was just the markets’ way of signaling a higher degree of confidence in this pessimism….