Principal's Shah Sees Prospect for Fed Hikes Beyond May

The transcript discusses the current economic conditions, focusing on the labor market's role as a lagging indicator and its impact on recession expectations. It highlights the market's anticipation of a recession and the risks of stagflation. The discussion also covers inflation trends and potential changes in Fed policy, emphasizing the importance of data dependency in decision-making.

What is considered the most lagging indicator in the economy according to the transcript?

• Inflation rates

• Labor market

• Stock market trends

• Consumer spending

Why are markets almost hoping for a recession, as mentioned in the transcript?

• To increase consumer spending

• To decrease inflation

• To boost employment rates

• To start a new economic cycle

What is considered the worst-case scenario for risk assets?

• Hyperinflation

• Deflation

• Stagflation

• Recession

What assumption is underpinning the market's current expectations?

• Inflation will increase

• The Fed will raise rates

• Inflation will continue to decrease

• Unemployment will rise

What might prompt the Federal Reserve to consider a new rate hike in September?

• A decrease in consumer spending

• A rise in stock market indices

• A plateau in inflation at 4.5%

• An increase in unemployment