We should have been in a recession by now, at least if we had listened to mainstream economists. Quite the opposite happened. Unemployment has fallen to near half-century lows, consumers continue to spend, and demand for residential real estate remains insatiable. The dire predictions begin in mid-2022 and culminate in early 2023, with 40 out of 44 respondents to a Bloomberg economist survey saying a recession will occur in that year. Management became concerned after watching TV news about the economic slowdown. Stock market strategists expressed pessimism. Investors who listened too closely may have made a costly mistake, missing out on the tech stock recovery and the S&P 500's 24% rise in 2023. In January of this year, the S&P 500 index hit an all-time high.
Things could get even worse from here. But the difficulties that economists, traders, and business leaders have faced in predicting the near future say a lot about the times we've been living through. We all know how the COVID-19 pandemic has disrupted expectations, but for financial decision-makers, the nearly two years from March 2022 will be disruptive in and of themselves. Ta. As soon as he became Fed Chairman Jerome Powell They began raising benchmark interest rates from near zero to stem the fastest inflation in a generation, but the crystal ball shattered and the strategy was thrown out the window. Here's a look back at some of the notable mistakes, mistimings, head fakes, and outright blunders since the end of the easy money era. —Katya Dmitrieva
