Concerns about a potential recession are rising on Wall Street as economic data falls short of expectations, pointing toward an economic slowdown. Out Friday morning, the Personal Consumption Expenditures (PCE) index — the Federal Reserve's preferred inflation gauge — for the month of January saw core PCE, which excludes volatile food and energy prices, increase 0.3% month-over-month while rising 2.6% higher annually.
Neil Dutta, head of economic research at Renaissance Macro Research, joins Catalysts to discuss these issues, clarifying his perspective on the drivers behind the slowdown.
"I think it's primarily a function of monetary policy being too tight. I don't think people are pulling back signing contracts on new and existing homes because they're worried about tariffs," Dutta tells Madison Mills.
Dutta also notes slowing labor market trends, contributing to weaker income growth. Despite these concerns, Dutta doesn't foresee an immediate recession: "I think recession risks are rising, but I think once the Fed [Federal Reserve] gets on the right side of the eight ball, you know, those recession risks will decline."
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This post was written by Josh Lynch