Recession may happen in 2023 and won’t be deep

<p>Five out of the last six times there’s been an inverted yield curve, a recession has followed.</p> <p>But the team of analysts at Thirty Capital thinks that if a recession does occur, it won’t happen in the very near future.</p> <p>Says Thirty Capital Analyst Bryan Kern: “The Fed has only hiked 25 bps, so they haven’t really done anything yet, outside of providing commentary that’s sent the market into a tailspin.”</p> <h1>Talk of a recession is premature, overblown</h1> <p>Bryan does note that there are some signs of slowing growth, particularly in retail sales. The question now is if the U.S. does have a recession, when will it happen?</p> <p>He thinks if a recession does occur it will be in 2023, and it won’t be severe. Of course, no one can predict the future, but Bryan believes the current narrative about an impending recession is premature and overblown.</p> <p>He adds it's important for the markets to focus on what’s at hand right now - high inflation and a war in Ukraine.</p> <h1>80 percent chance of a half point hike</h1> <p>The markets are expecting a full half point increase announcement at the Fed’s meeting next month.</p> <p>Analyst Jay Saunders points out that there is a fairly significant inversion in the SOFR swap curve, with the three-year point being the highest. He says that short-term rates will head north of one percent in the next few months. Listen to the full episode for Jay’s details of SOFR rates and what’s happening with SOFR in the episode.</p> <h1>Caps much more expensive</h1> <p>Despite the volatility, commercial real estate borrowers are busy and completed a lot of deals ahead of the end of the first quarter. Jay says borrowers need to think about how they will purchase a cap for any upcoming deals and how they intend to address their caps, given that they can be so expensive.</p> <p>Jay says the next thing the markets can watch out for is the Fed and its balance sheet. “I think the Fed would like to see long-term rates quite a bit higher than they are. They don't like inverted y