Can the US Consumer Prevent a Recession?


With Target crushing estimates, many are back believing the US consumer may be in fine shape. Bank of America CEO Brian Moynihan explained to CNBC after Target’s results that the US consumer is still strong and can keep the economy growing.

In a recent Real Vision Finance interview, Danielle DiMartino Booth, chief strategist at Quill Intelligence, discusses her macro-centric thesis that a recession is coming.

Said to all but guarantee a recession, the yield on the benchmark US 10-year Treasury note traded under that of the 2-year note again Thursday. The third recession indicator since last Wednesday.

US recession may be coming

Demand for Dollars to Strengthen the Currency

With a constant eye on gold and commodities, the US dollar is central to our investing mindset.

“If negative rates are going to be getting more negative, there will be a flocking to the ten-year treasury,” according to Danielle DiMartino Booth.

This should hold back gold and other commodities in the short term. But, to see gold where it is, with the US dollar index well above 95 is startling. Danielle also admits stepping back into the gold market for the first time in years.

Unlike the CEO of Bank of America, Danielle thinks the US consumer is rolling over; and, the consumer in China and Germany are also hurting as exports dwindle, specifically in the auto sector.

She continues,

“I think the US economy is definitely sliding into a recession.”

DiMartino Booth talks about the labor market; and, finally, where she sees the recessionary inflection point on the horizon.