The Transcript Editor's Commentary

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-Scott

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Game On

Earlier this summer, there were a few weeks when the economy looked like it might be headed for a recession. Recession fears quickly came and went though, as data improved in September and October. Brian Moynihan acknowledged this change last week and captured a key economic shift of 2024—confidence in the economy is clearly rebounding:

“The consumer was slowing down in late summer—we saw it. It was concerning me because I thought it was slowing down to the point where it may be underneath what would imply a stable 2% (plus or minus) growth economy with lower inflation. The good news is, as we came into September and October if you look at the two months together—particularly October—it looks like it's leveling out. The expectations of our consumers to spend more in the holiday season are up by 7%, which is good.”

Confidence started to rebound before the election but the removal of election uncertainty has allowed optimism to blossom. The quotes that we published in the Transcript this week tend to reflect an economy gearing up for a boom. Pent-up animal spirits are clamoring for release.

After two years of high interest rates, CEOs and investors are eager to get moving. This sentiment was voiced by Transunion’s CEO who said, “I'm a little bit greedy after a couple of years of difficult economic conditions. And so I'd love to see interest rates as low as they can go.”

This is especially apparent in the financial sector, which is excited about lower regulation and the return of both M&A and IPO activity. Citigroup’s CEO Jane Frazer said, “we are seeing the big unlock we've been waiting for” and that it’s now “game on.”

Wet Blanket Powell

Before anyone gets too excited though, Jerome Powell seems determined to make himself a wet blanket on the economy.