Bank credit went back to shrinking in early August. Since Trump was elected it pretty much stalled through to April, grew again for a few months, slowed in June/ July and has shrunk so far in August.
Clearly there is a spread of phases across the sectors with some like Autos probably in recession, others slowing, but many service sectors still going strong and driving some wage-inflation pressures and, in my view, oil is recovering.
If the overall economy continues to grow while a few sectors crash, like oil did 2014-2016, the Fed will be under pressure to hike rates. On the other hand a transmission mechanism like overall credit shrinkage or corporates starting an inventory liquidation cycle, could cause a few sectors contracting to morph into an overall recession.
I suspect either scenario (Fed hikes or recession) is USD positive.
Latest number was slightly positive, but so far this year its drastically slowed.
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