Nancy Lazar, chief global economist at Piper Sandler, and CNBC’s Steve Liesman join ‘The Exchange’ to discuss bond yield indicating recession in Q4, misconceptions about the lag effect of Fed tightening, and wage increases adding pressure to profit margins. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
» Subscribe to CNBC TV:
» Subscribe to CNBC:
Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.
Connect with CNBC News Online
Get the latest news:
Follow CNBC on LinkedIn:
Follow CNBC News on Facebook:
Follow CNBC News on Twitter:
Follow CNBC News on Instagram:
#CNBC
#CNBCTV …(read more)
BREAKING: Recession News
LEARN MORE ABOUT: Bank Failures
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
Recession is needed to see a sustained shift down in inflation, says Piper Sandler’s Nancy Lazar
As the global economy continues its recovery from the impact of the COVID-19 pandemic, concerns about rising inflation have been at the forefront of discussions. Many experts have been debating whether the recent surge in prices will be temporary or if it signals the beginning of a sustained period of higher inflation. Nancy Lazar, the highly respected economist at Piper Sandler, recently weighed in on the matter, suggesting that a recession might be needed to see a sustained shift down in inflation.
According to Lazar, recessions are typically necessary to break the inflationary cycle. She argues that during times of economic expansion, when demand exceeds supply, upward price pressures are often created. This is particularly true in the current context, where supply chain disruptions and supply shortages have contributed to higher costs for businesses, which, in turn, lead to price increases for consumers.
Lazar points out that historically, recessions have served as a corrective mechanism to rebalance the economy, bringing supply and demand back into equilibrium. During an economic downturn, demand decreases while supply catches up, resulting in a downward pressure on prices. A recession, she argues, is therefore necessary to cool down the overheating economy and alleviate inflationary pressures.
While Lazar acknowledges the negative consequences of a recession, such as job losses and decreased economic activity, she suggests that the longer-term benefits are worth considering. If inflation were to continue rising without intervention, it could erode consumers’ purchasing power and lead to economic instability. By allowing a controlled recession to take place, policymakers can potentially mitigate the risk of a more severe downturn in the future.
Lazar’s viewpoint challenges the notion that recessions are always detrimental to the economy. While recessions are undoubtedly associated with short-term hardships, she argues that they can also play a crucial role in maintaining long-term economic health. By curbing inflation, recessions can help to create a more stable and sustainable path for future growth.
It is important to note that Lazar’s perspective is not shared by all economists. Some argue that inflation can be controlled through other means, such as monetary policy adjustments or increased productivity. Others believe that the recent inflationary pressures are transitory and will subside as supply chains stabilize and pent-up demand eases.
Nevertheless, Lazar’s insights provide an alternative viewpoint to the current debates surrounding inflation and recessions. While the idea of a recession may be unsettling to many, it is essential to consider the potential benefits of such an economic slowdown in addressing the issue of inflation.
Ultimately, the future trajectory of inflation remains uncertain, and it will depend on various factors, including global recovery from the pandemic, central bank policies, and the ability of supply chains to stabilize. As economies continue to navigate these challenges, economists like Nancy Lazar provide valuable insights that help shape our understanding of the complex interplay between inflation and economic cycles.
There have been several transactions with both strategic investors and private equity over the past 15 years since the Great Financial Crisis — oftentimes the PE component was not 100% and the capital raises were far less than $400 Million, money moves quickly from the hasty to the patient. The biggest hurdle for investors is maintaining mental control through losses, and investing in the right places at the right time
When some half a century ago Donald Regan, chief of staff quipped to then president Ronald Reagan "speed it up" it left Ronnie dumpfounded to the point of him saying "we will let the bull loose". There the whole point was revealed to us. The flood gates of malarky by the innitiated into the ussury principles got wide open and what is going on right now is not a one iota different from anything else in the past. We're at the dealer's table playing poker and such is the game that dealer sees our cards and does hold to all the money and that means yours too. He wiĺl gladly provide more in order to let you play all your life. That last provission just got tuck to the national debt and is on your tab. Inflation is the magic trick solving everything. In Canada government was in fiscal basket case prior to onset of seventies. A lot of folks were lucky earning 2$ an hour. Yearly 4 grand. Within decade hourly wage got to zoom ten fold. Taxes on 40 thousand were not like those on 4000 $. Fiscal defficit disappeared like alladin from the bottle. Pure magic. Don't be suprized if your wage is going to be 300 $/hour if you just make now around 30/hour. Tax on your new income make a national debt thing of the past. Inflation is the key!.
Fake news. Most of inflation is from corporate price gouging. Issue could be fixed with antitrust enforcement
My greatest concern is how to recover from all these economic and global troubles and stay afloat especially with the political power tussle going on in US.
Crypto currency is utimately becoming the sure and quick way of making more money by wise individuals who love investing to always increase their wealths. it is no doubt that some few wise individuals are secretly becoming rich without any hard or physical
job by investing in crypto currency and Forex while majority are financially stagnant because they arent exposed to investing. this is the secret between the poor remaining poor and the rich becoming richer without stress.
If it wasn’t for the pandemic, we wouldn’t be in this situation today. Yes there is jobs. Still, our economy is somewhat slowing down. People today are investing in their own assets than loan’s because borrowing is too expensive.
Even if the dangers are higher, isn't the existing business sector also dangerous given that the majority of people adopting these tactics are seeing substantial profits? I believe that short-term trading, as opposed to long-term trading, is the preferred method for managing this downturn and high growth.
Recession is already here, only the Recession as defined by these Central Bankers may not be here, like negative growth in two consecutive quarters, growing job losses and so on… yes, one thing is true, recession starts with inflation and steadies with deflation… when it will end, depends on where in the wealth level you are
Why doesn't she lead by example and give up her job?
Recession. Then what? Stay there? For how long? And you think inflation just won't come back after Fed cuts rates?
Since the end of last year, I feel that inflation has been priced in the crypto market. Because they are market makers, these manipulative rodents are constantly two steps ahead of everyone. I'm hoping I'm wrong and they won't continue to dump it on individual investors as they have in the past. Those that hang on to their profits for the longest will profit the most; I trade and hold profits. Continue to do a fantastic job sellers cathy also been doing an excellent job evaluating all charts, trades, and tactics on BTC, which has helped my portfolio rise to 5BTC recently.
KEEP THE RATES UP!!! FED!!!! DONT LET HYPERINFLATION HURT AMERICA AND THE WORLD!!! SAVE US ALL!!! AND KEEP THE RATES UP FOR LONGER!!!! NEVER SLOW DOWN THE RATE BECAUSE IF RATES DROP!!!! WE WILL USE US DOLLARS AS TOILET PAPER!!!!!
Insana… please retire already!
Powell can't sleep again now. He should hike 100bps next meeting to stop the madness. Real estate Case Schiller Index shot straight up near all time highs in 5 months & GDP forecast shows overheated economy that does not respond to FED policy yet. Brutal inversion of yield curve needed until economic expectations are reset. If the data are confirmed (GDP & Case Schiller) it's about time for the FED to show who's in charge of the show!
The first point she is making is that inflation (3-4-5%) will stay with us. The second is that at a certain point high interest rates will cause a slow down in the economy and corporate profits.
hmm, rising unemployment and rising inflation, that would have been traditionally called Stagflation however they are skirting this by claiming that wages are going up (growing), when in fact they are not when an accurate basket of goods is the basis for analysis.
imagine hating people getting paid more this much
Nancy is spot-on.