Campbell Harvey, Duke University professor of finance, joins ‘Squawk Box’ to discuss the Fed’s inflation fight, why he believes the central bank has overshot and should have stopped raising rates in January, the state of the economy, Treasury yields, and more. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
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BREAKING: Recession News
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Recession at this point ‘is a self-inflicted wound’, says Duke’s Campbell Harvey
As the global economy continues to grapple with the effects of the COVID-19 pandemic, fears of a looming recession have become more pronounced. In a recent interview, Campbell Harvey, a professor at Duke University’s Fuqua School of Business, has called the current economic downturn a “self-inflicted wound.”
Harvey, who is known for his work on financial markets and risk management, argues that the recession is not solely the result of external forces such as the pandemic, but rather a consequence of policy decisions and human behavior. According to Harvey, the failure to contain the spread of the virus and the resulting lockdown measures have led to a sharp contraction in economic activity, causing widespread job losses and business closures.
“The recession we are facing today is largely a result of our own actions, or lack thereof,” Harvey said. “The failure to implement effective public health measures and the reluctance to enforce strict lockdowns have prolonged the pandemic and its economic impact.”
Harvey’s assessment aligns with the views of many economists who have criticized governments for their handling of the crisis. In the United States, for example, the federal response to the pandemic has been widely criticized for its lack of coordination and consistency, leading to a disjointed approach to containing the virus and supporting the economy.
“Many countries have been slow to act and have failed to implement the necessary measures to curb the spread of the virus,” Harvey said. “This has had a significant impact on consumer confidence and spending, leading to a sharp decline in economic output.”
While Harvey’s comments may seem pessimistic, they also point to the potential for a recovery if the right measures are taken. For him, a successful economic recovery will depend on effective public health measures, targeted fiscal stimulus, and strong leadership.
“The good news is that we have the tools and knowledge to mitigate the damage and set the stage for a strong recovery,” Harvey said. “But it will require decisive action and strong leadership at all levels of government.”
As the world continues to grapple with the economic fallout of the pandemic, Harvey’s assessment serves as a sobering reminder that the recession is not an unavoidable fate, but rather a consequence of policy decisions and human behavior. With the right approach, it is possible to mitigate the damage and set the stage for a strong and sustainable recovery.
Given reduced inflation signals and the belief that the Federal Reserve has halted rate hikes, what are the best additions for a $500K portfolio to enhance overall performance through diversification?
Of all the guests I have heard talk on CNBC, this guy is the only one to give actual detail and reasoning instead of some astrology horoscope BS.
The market's movements are so dynamic, and I admit I can't always keep up. That's one of the reasons I've sought guidance from an expert. Some might think I'm exaggerating, but in the last 6 months, I've seen around 60% in profits. Sure, skeptics might say I'm lying, but the numbers don't lie. By leaning on an expert, I've found it takes less time, effort, and sacrifice on my part, and I'm much closer to my financial goals.
A flailing U.S. economy and elevated global tensions reduce the likelihood of prolonged inflation or higher long-term Treasury yields. All my focus right now is how to safeguard and improve my $2m portfolio from market changes based on the conflict in the middle east.
Who else turned the video off once he said that inflation was below 2%??? bahahahahahaa
Fed should have stopped in January? How does this clown have tenure?
They want people who made money in real estate and stocks after the pandemic to be broke so they can go back to work at their bs jobs
Where are the housing rates going down? That statement alone shows me you are uninformed.
economists are always wrong
wrong
Don't know if he's right, but he sure makes some really good points. If he is right, look out below next year
It’s the working poor that will suffer the most. I’m so tired of the rich playing games with or lives
delusional
Until the Fed balance sheet is cleared we will see high inflation. To much money chasing assets. Land ,houses,etc.
Duke guy is nuts.
I think most lnvestors like myself right now are more interested in how we can enhance our earnings during this period of adjustment given the current economic difficulties that the country is experiencing in 2023. Watching my $880k savings vanish after putting in so much effort to accumulate them is heart wrenching. Its just exhausting.
Every single video cnbc put the word "Recession". Why?
Nobody knows it more than this Phd. He got his Phd. by doing significant research on yield curve inversion as its relates to recessions in the modern age's economy. When this guy is worry, you better gets your money into CASH and wait for the other shoe to drop. The good professor is saying that the mother of all shoe is dropping in 2024 because the long rates have gone up this time, as the short rates goes back down as the curve flatten out. Somethings will break when no houses, cars, trucks, furnitures, and big ticket items can be affordably finance.
No Becky….wrong
Since when do rising real rates all along curve signal a bond market forecasting imminent recession?
Harvey knows this but is conflating bull and bear YC steepening because it fits better to his recession red flag waving. No doubt we will have a recession eventually, but rising real rates suggest faster, not slower growth ahead.
Job loss is required to force housing distress sales. That’s the last leg before inflation numbers can go down. Zombie companies will go under and start this process. Where’s the fast forward button?
The money is leaving big banks to move to money markets to earn life changing 5% , yes champ thats why you are still stuck in academia , why would anyone wish to earn 5% on treasury bills when nasdaq and snp 500 are rallying 5% in a week ! Incredible such guys are teaching finance.
Housing inflation is cause by the fed policy both before and after their rate changes. Too low rate caused pricing surging and too high rate now causing lower inventory and higher longer houing price and less market activities. I wonder if the fed see it.
One of the best explanation about Us economy what really going on right now,ask him if he can appear more interview.Thx.
I have never been more sure in my life but this guy definitely has a stake in the market for fed to decrease rates. I don't know where , he may have arm or his bonds are losing value but he definitely is biased.
He must be long, because inflation is still at 3.5 %
I get 5 to 6% interest on a normal UK savings account (fixed for 1 or 2 years). Almost no interest on my normal account though, so I agree with Campbell to a point, but you don't have to buy funds or bonds to get 5% interest.
Chill bro
The really big problem is the FED needs to sell $1.5T in bonds by March of 24 to fund the government while there are fewer buyers. We may wake up to Kaos one day.
This guy is such a joke. If he doesn’t see the failure of the last 15 years using zero bound rates, QE. Living on free money created this mess. Covid bailouts. His declaring the banks in trouble are a little late to the party. Time to stop living on borrowed money and live within your means
Many of the spending bills were written to be spent over 6-7 years. The bigger ones. Fiscal policies will provide a buoyancy to the economy for years. No need to panic.
Long rate is coming down. And as recession gets priced in, rates will fall along with inflation. Housing market will unthaw next year.
10 yr 4.5% currently.
Chill out professor. Life is stress. Stress is needed for progress. You need good stable productive growth. Not speculative bubbles.
It’s very easy to see what’s happening. The fed paused, bond yields dropped fast, but gold, commodities, bitcoin kept going up. This means fed is not fighting inflation anymore. They indirectly somehow purchased treasuries (QE) again. But inflation is still there. That’s why commodities are still going up as bond yields dropped. They kicked the can down the road. They averted a recession. But come next year the inflation will be way worse and yields will skyrocket. For next 7 months interest rates will drop. Nice present for the next president.
He brings up some good points. The lagging data which the Fed bases their decisions on should be changed to current/leading data. It seems like this upcoming recession is just another way for the rich to get richer and to hurt the little guy.
This clown doesn't care how much you pay in rent, gas, or food