Half of the U.S. economy is in recession, says research firm founder

In fact, you know, we were looking at the unemployment rate and the employment data state by state. And it's apparent to me that half of the US economy right now is actually in a recession, and people are focused on the half that isn't. But the recession pressures are building. I know that nobody's talking about them, but those recession pressures are building. And people calling for a soft landing. Well, we're already in the soft landing. The question is what happens next? And I think that the next landing is going to be a recession that surprises everybody, just as it did in 2000. And one, 2008 won't be as severe. But the business cycle isn't dead. So talk to us about where you see the most pressure, right, That's going to make the economy go from soft to to the bottom. Following out, Well, two prime areas right now you're seeing the housing market is rolling over again and that has very strong multiplier impacts to the rest of the economy. And you're seeing a whole lot of pain spreading in front of the consumer sector, especially low income and middle income households who all of a sudden feel these high prices. They didn't feel them before because they were swimming in $2 trillion of excess savings. So savings are gone. So now consumers are really feeling the pinch. And of course, we still have the lagged impact of all the damage the Fed has done. The economy has not come close yet to resetting to this new higher interest rate regime. And it got clogged up last year because of all the fiscal stimulus and that last leg of the excess savings been put to work. That's in the rearview mirror. So it's really two critical components here of domestic demand, housing and cyclical consumer spending. So it sounds like the Fed can't cut too soon then. So Friday the PCE print, if it does come in softer, let's say at 26 or so, that increases the they're going to start refresh rate head cycle in September. Do you think that's when they're going to move? Well, I think the markets already are priced for a flat headline on the PC deflator and .1 on core. So we'd have to come in a lot better than that to move the needle on the markets. I think the Fed, look, the bottom line is the longer they wait, the more they're going to have to go. And they seem to be like the proverbial deer in the headlights. They, they were so shamed and embarrassed by transitory and then missing the inflation that they're really scared. They're scared. They're scared to move rates and in their view, move them prematurely. I don't think that's justified. But these are human beings running the central bank. But it's a case of one once burned, twice shy. I think that they would sacrifice the economy to make 100% sure that inflation is heading towards target sooner rather than later. And that's the new operative work, right? It used to be transitory. Now it's confident. They need confidence. They need ongoing confidence that inflation, the downward momentum is going to remain intact. I think that it will be, but they're not so sure. So they're going to bite their time. I, I do agree with with Barry Knapp. I think that he had mentioned September. I think that they'll set the plate for that somewhat at the July meeting. And then Jackson Hole, I think that Powell will come out and give that hint that September cuts going to come. I don't think the election is going to get in the way of that. But again, the economy and inflation and the labor market are going to dictate that. But I think that I am starting to see, I know nobody else seems to, but I'm starting to see recessionary pressures build and I think the early year hiccup and the inflation numbers were earlier hiccup and I think we're going to resume the downtrend through the balance of this year and well in a 2025.