Most important takeaway from Q4 GDP data is that short rates are finally above inflation and nominal growth for final sales of domestic product. “Tight” is a matter of opinion, but monetary policy is no longer “easy” and now getting “tighter” -- growth and inflation decelerated through the quarter. My expectation of a mild recession beginning in Q2 appears on track. There is the swing to positive real rates, the beginnings of a mild inventory correction, and the “asset crunch” softening growth on into the current quarter (I wrote how the asset cycle changes how monetary policy works in Oct 2019). Next week’s 25 BP ... (full story)