The red light warning of a US recession

TLDR & TLDL: Global bond traders are concerned the US Federal Reserve is about to hike interest rates too fast and drive the US economy into recession in its increasingly aggressive efforts to drag down inflation. A key indicator of future US recessions is flashing red. See more below the paywall fold and in the podcast above.

The overwhelming narrative in the global economy right now is that inflation is out of control and central banks need to crack down hard with high interest rates. But bond markets are actually saying there is a risk of over-tightening lesading to a painful recession. Photo by Jonathan Rados on Unsplash

In other news this morning:

• PM Jacinda Ardern announced a doubling of indoor gathering limits to 200 and the removal of limits on outdoor gatherings such as concerts from this Saturday morning, including removing outdoor mask wearing requirements;

• the compulsory use of vaccine passes and QR code scanning will end on Monday April 4;

• the vaccination mandates for Education, Police and Defence and those businesses operating vaccine passes will be dropped from April 4, while mandates will remain in place for Health, Aged care, Corrections and Border and MIQ; and,

• Air NZ announced it would start flying non-stop from Auckland to New York from September 17.

I’m in Auckland today for a speech by Grant Robertson and to do this week’s podcast for When the facts change. I’ve put back the hydrogen podcast because a key interview subject is not available. I’ve pivoted to a piece on regulated inflation.