@IanRHarnett The shadow banking sector / private credit / PE have become a significant lenders. Traditional bank lending is now less important and therefore the rate hikes passthrough weaker. Plus, lots of HH savings, the result of past fiscal expansion. => higher terminal rate.
@IanShepherdson Thank you @IanShepherdson. Isn’t the issue that growth has to fall well below potential to create a sufficient negative output gap for inflation to return to target?
The basic argument that we never(?) had inflation from >5 back to 2% without a recession?
@HRGPFOREVER Fair point that not all can be replaced/replicated. But grocery stores, retail shops etc is being taken over. They may expand into services one day; they have too much cash waiting. Thank you
@darioperkins PMIs should work indeed and you will have more data points than quarterly GDPs.
Also, note this paper: https://t.co/FukeoUnGK1
"most of the economic contraction is caused by the virus itself and occurs regardless of whether
governments mandate social distancing or not."