Economic Take

In the final episode of this podcast, Jim takes a look back at 50 years of economic transformation—and offers optimism about what the future holds for the economy and markets. If you’re looking for more economic and market insights, subscribe to our weekly update or visit jpmorgan.com/cb. For your next podcast, consider the firm’s new “Making Sense” series. 

Jim sits down with Kerry Jessani, Head of Healthcare, Higher Education and Nonprofit Banking for Commercial Banking, to explore the ways the current economic outlook affects colleges and universities, and even how technology has transformed the student experience.  

A sluggish recovery from economic crises worsens outcomes for the government, disrupts people’s lives and erodes wealth. After a century of dealing with economic cycles, American leaders implicitly now understand the costs and benefits of policy activism.    

Though it’s generating buzz, the May CPI report reflects the same patterns we’ve seen for months: that our inflation issues are supply-side problems and not a result of too much demand.  

In the big picture, there are no signs the economy is overheated. But the evidence plain to see in certain sectors, likely a result of consumer shifts away from services and toward goods during the pandemic. Added together, the odds of a Fed-triggered recession are pretty slim.  

Among a shifting market landscape, the interplay between monetary and financial conditions can be likened to that of conductors and musicians—one sets the tone while the other responds.

Stock market valuations have been high by historic norms, but is the standard way of valuing the stock market still applicable?    

Today’s Federal Reserve has a few tools at its disposal it didn’t have during the inflationary era of the 1970s: a game plan, time and flexibility.  

Despite the talk of inflation, bond investors still seem to agree with the Fed’s initial instinct that many of the current price pressures will prove to be transitory. Also: Why globalism is still kicking.

The Fed worked hard to prop up the economy during the pandemic. There’s no reason to assume its leaders are now willing to risk pushing the economy into a recession when long-term inflation expectations are still below 2%.

Many of us remember the price shocks of the 1970s, but there are not many parallels with that era in terms of the forces that currently drive inflation. Find more market, economic and business insights at jpmorgan.com/CB.  

There’s a widespread notion that the current spike in prices signals an overheated economy. But under close inspection, those details don’t add up.  Find more market, economic and business insights at jpmorgan.com/CB.

The Fed’s activity now is a hallmark of its modern approach: Set investors’ expectations for steady, predictable long-term inflation — and avoid the temptation to hit the brakes.

Employment has grown by 887,000 monthly on average since April 2020 as the economy got back on its feet. Now that we’re back to pre-pandemic employment conditions, the pace of hiring will grind down very quickly.  

Will the Fed’s game plan pull the rug from under the recovery? The roller-coaster ride over the past two years seems less influenced by the Fed and more by non-monetary factors.  

The Fed said last week it expects growth to settle down to a trend-like pace and that unemployment will stabilize. What explains all the concern out there where the Fed sees no issue?

Will the recent spike in gas prices and other commodities set back the post-pandemic economic recovery? There’s good reason to think we’ll be able to ride this one out.  

The economic numbers we talk about are seasonally adjusted, smoothing out the natural ups and downs of a calendar year so we get a clearer picture. But since the pandemic, it’s getting tricker to tell what’s a standard seasonal swing or a COVID curveball.

The current geopolitical crisis will slow growth by a couple percentage points. But the drag caused by rising energy prices will be heaviest for regions of the globe that depend on imported fuel.

Concerns that rising labor costs could be inflationary are misplaced because wages move in concert with other factors—many of them decades in the making.