What Never Stops Moving and Has Giant Teeth?
It's the Sharkonomy, stupid, and it behaves more like a Great White than an airliner coming in for a landing, soft or otherwise.
The economy has evolved to never stop moving.
Photograph: ‘Jaws’/Silver Screen Collection/Moviepix/Getty.
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There is relief in the cabin of the US economy as its pilots try to coax it in for a soft landing. Friday brought one of the biggest falls in two-year Treasury yields — a critically important measure and a barometer of where the market thinks rates are moving in the short term — since the Federal Reserve began its current aggressive tightening campaign a year ago. That’s because a soft landing looks more likely. But is that the right analogy?
One reader points out that pilots of the economy never get to come in to land. Their whole point is they have to keep it moving. That makes the economy more like the mythical Martlets, birds without legs who are doomed to fly forever. Or, more menacingly, the economy is like a shark, which — as everyone who’s seen Jaws will know — has evolved to eat, move and reproduce, even if it’s not as simple as an “eating machine.” Stopping, or landing, isn’t an option — and just as a bigger shark requires a bigger boat, bigger shocks to the economy require a bigger response to keep moving.
Only the June meeting of the Federal Open Market Committee, which came after the Fed had controversially leaked its intention to hike by 75 basis points in advance, and the announcement of the consumer price index data for October, which showed the first unambiguous reduction in inflationary pressure, provoked bigger downward shifts in yields: