With the United States inflation cooling off, economists remain cautious about whether the economy is truly out of the woods, as projections for a recession still loom on the horizon.
In this regard, professor of Applied Economics at John Hopkins University Steve Hanke has warned that a recession could strike as early as the first quarter of 2024, noting that the current trajectory of the money supply indicates an imminent downturn, he said during an interview with David Lin on June 30.
Hanke explained that economic activity typically responds to changes in the money supply with a lag of around six to 18 months. Analyzing the data, he pointed out that the money supply measure began declining significantly in July 2022 and has continued to decrease since then.
This places the economy within the anticipated time frame for the emergence of weakness and recessionary conditions. He emphasized that this outcome is already “baked in the cake,” given the crucial role of money in drivin
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