A regular Wall Street Journal survey found that economists think there is a 63% chance of a recession in the next year. And if they are, does that mean that stock prices and bond yields must be higher or lower? Obviously, economists still don’t have a crystal ball, and obviously a recession will mean lower stocks, and possibly lower bond yields, as they always do. This time, they think they understand because the problem with the economy is well understood: the central bank aggressively raises interest rates to fight inflation. Third, the sharp rise in interest rates that has already occurred does not cause a recession, or the recession is so superficial that profits are basically good.

Source: Wall Street Journal December 04, 2022 13:44 UTC