Finance

Here are some stark facts about family structure and children in America. Whereas the poverty rate among youngsters living with two married parents is 7.5%, among those raised by a single mother it is 35%. Children of married parents tend to behave better in school, stay in education longer and earn more as adults. Those raised by married parents appear to be at an advantage even after controlling for the age, education and race of their mothers.Yet marriage has been in long-term decline (and without a compensating rise in unmarried cohabitation). Today more than two-fifths of births are to unmarried mothers, up from less than a fifth in 1980. The fall is unequal across demographic groups: only 11% of births to college-educated mothers are outside wedlock. Marriage has gone from being a pretty universal institution to an exclusive one that propels life advantage through generations.In recent years economists have documented these trends and their relationship to inequality and social mobility. Melissa Kearney of the University of Maryland summarises the literature in a new book, “The Two-Parent Privilege”. Ms Kearney is aware that many liberals—and very few conservatives—will wince at her findings, and writes in an almost apologetic tone as a result. “Not talking about these facts is counterproductive,” she pleads.Why does being raised by two parents matter so much? One reason is the extra earnings an additional adult may bring to a household, which contribute to the enormous costs of child-rearing. Yet it is not all about money. Children raised by mothers who divorce and remarry tend to do worse than those raised by both their biological parents. The beneficial effects of two-parent child-raising appear to be particularly strong for boys, and even spill out beyond the boundary of the home. Researchers have found that the number of black fathers living in the local neighbourhood strongly influences the life chances of black boys.The question is what to do about all this. Ms Kearney does not argue for a return to conservative social practices, such as shotgun marriages after unplanned pregnancies or encouraging parents to remain in unhappy unions. She cites research showing that legal changes making divorce easier (the introduction of “no fault” or “unilateral” divorce) result in worse outcomes for affected children. But, she says, such laws have a big advantage: they help adults escape bad situations and are probably desirable as a result. On top of this, some households benefit from the absence of a negative influence. Children whose parents are charged with a crime tend to do better if that parent is sent to prison. If single mothers are single because the men who fathered their children would have been bad second parents, then their offspring would have had little chance of better life outcomes in the first place.Ms Kearney is more interested in whether the underlying causes of single parenthood can be fixed, so that more happy marriages are formed. She laments the long-term decline in the availability of good jobs for men without college education, which is thought to reduce the pool of “marriageable men” and—consequently—present fathers. She also highlights that social norms now exert less pressure, even on parents in a healthy relationship, to live together. To demonstrate the importance of these norms, she compares the effects of two economic booms that took place a generation apart. The Appalachian coal rush of the 1970s and 1980s boosted men’s wages; the result was more marriages and, for married couples, more births—but not more births out of wedlock. Decades later, amid different norms, the shale oil and gas booms had different effects. They boosted births among married and unmarried women alike, and had no effect on the propensity of couples to marry. Therefore Ms Kearney concludes that both money and mores are needed for additional two-parent homes to form.For all the striking statistics in the book, the author does not offer an especially rousing call to arms. Ms Kearney’s four prescriptions are to promote a norm of two-parent homes, to improve the economic position of men without a college education, to scale up the pro-family programmes that work and to strengthen the social safety-net for all family types.Yet policymakers are already obsessed with male-dominated middle-class manufacturing jobs. Recently this has meant more protectionism and other policies that do more harm than good. And it is doubtful that governments can do all that much to alter social norms, just as they hold little responsibility for the fact that they changed in earlier decades. Past research (of which Janet Yellen, America’s treasury secretary, was a co-author) has theorised that technological development—namely, the wider availability of contraception and abortion—was the fundamental cause of the rise of single parenthood in the late 20th century, because it altered the premarital behaviour of both men and women. Although some conservatives argue that the welfare system is instead to blame, since it made single motherhood a less daunting financial prospect, this is at odds with the evidence. As Ms Kearney notes, restricting welfare does not reduce births and single-motherhood is more common in America than in countries with generous handouts. Moreover, the record of trying to promote marriage with tax incentives and the like is one of failure. Without more concrete proposals, Ms Kearney is at risk of having identified a trend that correlates with poverty, but is no easier to solve.Happy familiesPerhaps knowledge of what produces successful adults is most useful to individuals planning their own lives. The safest bet for anyone who wants to have children who thrive is probably to settle down. The vast majority of college graduates already seem to believe this, at least based on how they behave, if not how all of them talk. Anyone who doubts that the two-parent privilege exists should read Ms Kearney’s book. Unfortunately, that does not mean there is much in its pages for policymakers to exploit. ■Read more from Free exchange, our column on economics:Renewable energy has hidden costs (Sep 21st)Does China face a lost decade? (Sep 10th)Argentina needs to default, not dollarise (Sep 7th)For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More

The Micron Technology Inc. offices in Shanghai on April 6, 2023.
Qilai Shen | Bloomberg | Getty Images

Check out the companies making headlines in extended trading.
Micron Technology — The chip stock slid 4% in extended trading after Micron offered weaker-than-expected earnings guidance for the current quarter. Micron said to expect a loss of $1.07 per share, while analysts polled by LSEG, formerly known as Refinitiv, expected 95 cents. Elsewhere, the company posted a narrower-than-expected loss for the fiscal fourth quarter, as well as revenue that came in ahead of expectations. Current-quarter revenue guidance is also higher than analysts anticipated.

Peloton Interactive — The stationary bike manufacturer jumped 13% after the bell on news of a five-year partnership to develop content for Lululemon. Meanwhile, Lululemon added nearly 1% in extended trading.
Jefferies Financial — The bank retreated 3% after reporting fiscal third-quarter earnings of 22 cents per share on revenue of $1.18 billion, down from the year-ago period. Jefferies said this quarter’s earnings were affected by a pretax loss in the company’s legacy merchant banking portfolio.
H.B. Fuller — The chemical company slipped about 1% following a weak financial report for the third quarter. H.B. Fuller reported $1.06 in earnings per share, excluding items, on $900.6 million in revenue, while analysts polled by FactSet forecast $1.14 in earnings per share on $954 million in revenue.
Duckhorn Portfolio — The luxury wine producer lost 2.8% after giving full-year guidance that was worse than analysts anticipated. Duckhorn said full-year earnings should come in between 67 cents and 69 cents per share, excluding items. The consensus estimate of analysts polled by FactSet sat slightly higher at 70 cents per share. The company guided full-year revenue between $420 million and $430 million, less than the $432.8 million forecast by analysts. However, the company was able to beat expectations on both lines in its fiscal fourth quarter. More

Pavlo Gonchar | Lightrocket | Getty Images

Check out the companies making headlines in midday trading.
Media stocks — A handful of media and studio stocks rose Wednesday after the nearly 150-day writers’ strike ended. Shares of Warner Bros. Discovery and Paramount Global jumped more than 2.5%, while Comcast added 0.9%. Disney hovered near the flatline while Netflix inched up 0.3%.

MillerKnoll — The furniture stock soared more than 27% after posting fiscal 2024 first-quarter earnings that topped Wall Street’s expectations and upped its earnings guidance for the full year. Excluding items, MillerKnoll said it now expects earnings per share to range between $1.85 and $2.15, versus its prior guidance of $1.70 to $2.00 per share.
ChargePoint, Blink Charging — Shares of ChargePoint and Blink Charging gained 4.1% and 5.5%, respectively, after UBS initiated coverage of the electric vehicle charging stocks with buy ratings. Both stocks look well-situated to capitalize on accelerating EV adoption, the firm wrote.
Costco — Shares of the wholesale superstore added 2.1% on the heels of a fourth-quarter earnings beat. Costco executives noted higher store traffic and an 8% uptick in memberships year over year.
XPO — Shares added roughly 2% after XPO stock was upgraded to outperform by Evercore ISI, with analyst Jonathan Chappell highlighting margin growth potential and stronger pricing power.
Mattel — Shares of the toymaker rose more than 4% after Morgan Stanley initiated coverage of Mattel with an overweight rating. The investment firm said Mattel should see its sales and margins expand in the third and fourth quarters, helped by the success of the “Barbie” movie.

Amazon — Amazon shares fell 1% Wednesday, a day after the Federal Trade Commission filed a long-anticipated antitrust suit against the technology giant. The shares fell 4% Tuesday.
Levi Strauss & Co. — The apparel maker added 1.2% after TD Cowen initiated coverage at an outperform rating. The firm said Levi’s is in the “early innings of a favorable denim cycle.”
Guardant Health — The oncology company popped 5.6% after Piper Sandler upgraded it to overweight from a neutral rating, saying the recent sell-off creates a “compelling opportunity” for investors.
AAR Corp — Shares of the aircraft services company rose 2.3% on the back of its quarterly earnings report. The company beat analysts’ forecasts on earnings and revenue in the first quarter of the 2024 fiscal year and reported $550 million in quarterly sales, up 23% from the prior year.
Kosmos Energy — Shares surged more than 6% after Bank of America upgraded the upstream oil company to a buy from neutral rating, saying Kosmos Energy’s current valuation looks compelling.
— CNBC’s Brian Evans, Alex Harring, Jesse Pound and Hakyung Kim contributed reporting. More

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With the S&P 500 on pace for its worst monthly performance since December of last year, investors are increasingly turning to alternative assets outside of equities and bonds to generate returns.
One of those strategies is private credit. Despite the changing macro backdrop, the industry has posted annual gains for the last 13 years and is expected to continue drawing strong interest from institutional investors. According to a new report by Pitchbook, investors are likely to put more than $200 billion in commitments into private credit this year, for the fourth year in a row.

As the strategy gains steam, some are concerned that higher-for-longer interest rates could put more stress on the balance sheets of borrowers. Though, Michael Arougheti, who helms one of the largest private credit firms in the world, said he’s not too concerned about a major default cycle.
“I would expect default rates to tick up but not to dangerously high levels,” Arougheti said in an interview with CNBC’s Leslie Picker. “The irony of this moment in time, which is unlike many cycles we’ve seen before, the stresses are being created by liquidity and high rates not deteriorating cash flow.”
However, as servicing the debt becomes more expensive, that could force more negotiations between private credit managers and their borrowers.
“If rates stay high for long…through the end of 2024, that debt service will force companies back to the table,” Arougheti added.
Arougheti said the firm has been benefitting from rising rates, boosting their relative return. He noted that in pulling data points from the 3,000 portfolio companies Ares lends to and invests in, he’s seen “fundamental strength despite the rise in rates.” More

According to t. s. Eliot, April is the cruellest month. Shareholders would disagree. For them, it is September. The rest of the year stocks tend to rise more often than not. Since 1928, the ratio of monthly gains to losses in America’s s&p 500 index, excluding September, has been about 60/40. But the autumn chill seems to do something to the market’s psyche. In September the index has fallen 55% of the time. True to form, after a jittery August it has spent recent weeks falling.Such a calendar effect flies in the face of the idea that financial markets are efficient. After all, asset prices ought only to move in response to new information (future cash flows, for instance). Other fluctuations, especially predictable ones, should be identified, exploited and arbitraged away by traders. Yet this September there is no mystery about what is going on: investors have learned, or rather accepted, something new. High interest rates—most importantly in America but also elsewhere—are here for the long haul.The downturn was prompted by a marathon session of monetary-policy announcements, which began with America’s Federal Reserve on September 20th and concluded two days and 11 central banks later. Except for the Bank of Japan, which kept its short-term interest rate negative, all the big hitters repeated the “higher for longer” message. Beforehand Huw Pill of the Bank of England likened rates to Table Mountain, the flat-topped peak overlooking Cape Town, as opposed to the Matterhorn, which has a triangular summit. Christine Lagarde, president of the European Central Bank, raised rates and spoke of the “long race that we are in”. The Fed’s governors, on average, guessed that their benchmark rate (currently 5.25-5.50%) would still be above 5% by the end of 2024.image: The EconomistFor the bond market, this merely confirmed expectations that had been building all summer. The yield on two-year Treasuries, especially sensitive to near-term expectations of monetary policy, has steadily risen from 3.8% in early May to 5.1% today. Longer-term rates have been climbing as well, and not just in America, where the ten-year Treasury yield has hit a 16-year high of 4.5%. Ten-year German bunds now yield 2.8%, more than at any point since 2011. British gilt yields are within striking distance of the level they hit last autumn, which were then only reached amid fire sales and a market meltdown.At the same time, fuelled by America’s robust economy and the expectation that its rates will reach a higher plateau than those of other countries, the dollar has strengthened. The dxy, a measure of its value compared to six other major currencies, has risen by 7% since a trough in July.By comparison with the bond and foreign-exchange markets, the market for shares has been slow to absorb the prospect of sustained high interest rates. True, borrowing costs are not its only driver. Investors have been seized by euphoria over the profit-making potential of artificial intelligence (ai) and a seemingly inexhaustible American economy. The prospect of rapidly growing earnings, in other words, might justify a buoyant stockmarket even in the face of tight monetary policy.Yet it appears investors had also taken a pollyanna-ish view of interest rates, and not just because the most recent fall in prices was triggered by pronouncements from central bankers. Since shares are riskier than bonds, they must offer a higher expected return by way of compensation. Measuring this extra expected return is difficult, but a proxy is given by comparing the stockmarket’s earnings yield (expected earnings per share, divided by share price) with the yield on safer government bonds.Do this with the s&p 500 index and ten-year Treasuries, and you find that the “yield gap” between the two has fallen to just a single percentage point, its lowest since the dotcom bubble. One possibility is that investors are so confident in their shares’ underlying earnings that they barely demand any additional return to account for the risk that these earnings disappoint. But this would be an odd conclusion to draw from economic growth that, while robust, has presumably not escaped the business cycle entirely, as recent disappointing consumer confidence and housing data show. It would be an even odder conclusion to draw in relation to the potential profits from ai, a still-developing technology whose effect on firms’ bottom lines remains mostly untested.The alternative is that, until now, investors have simply not believed that interest rates will stay high for as long as the bond market expects—and central bankers insist—they will. If that is the case, and they are now starting to waver, the next few months could be crueller still. ■ More

Banks are facing mounting uncertainty as the commercial real estate (CRE) sector continues to struggle. But, tailwinds in our financial names should help safeguard their bottom lines. Club names Wells Fargo (WFC) and Morgan Stanley (MS) have bright spots in their operations that can offset potential weakness from CRE exposure. We’re optimistic about green shoots in Morgan Stanley’s dealmaking and the continued maturing of its wealth management business , along with progress in Wells Fargo’s multiyear recovery plans to expand its balance sheet and put past misdeeds behind it . Commercial real estate landscape Higher interest rates, tightening credit conditions and elevated office vacancies are weighing down the estimated $21 trillion commercial real estate sector . Many banks have exposure to CRE through loans. Fluctuations in property values and market conditions can impact their loan portfolios and asset quality. Economic downturns can lead to higher default rates and loan losses, affecting a bank’s profitability and overall financial health as well. Banks provide financing to investors and developers in the sector, making them vulnerable to weaker market cycles too. A lagging commercial real estate market can strain a bank’s capital reserves while a stronger market can boost incomes from lending and fees. Tomasz Piskorski, a property market expert and professor at Columbia Business School, said the key overhang on the banking sector is the central bank’s monetary tightening, and trouble in CRE is the “icing on the cake.” The Federal Reserve has hiked borrowing costs 11 times since March 2022 — from near-zero on the fed funds overnight bank lending rate to the target range of 5.25% to 5.5% — all in a bid to combat sticky inflation. The midpoint of the current range is the highest level in more than 22 years. “U.S. banks are now in a very difficult position and the main factor driving this difficult position is high interest rates,” Piskorski told CNBC in an interview. “This is one of the main problems affecting commercial real estate because a lot of these buildings were written at a lower rate and now they have to refinance to higher rates.” While there’s reason for concern in the broader commercial real estate market, we see the most pronounced challenges unfolding in offices. Work-from-home trends and tech layoffs have led to increased vacancies, decreased demand, and drastic reductions in property values. Office vacancy rates reached 18.6% in the first quarter of 2023. That’s 5.5% higher than when the Covid pandemic began to hit the U.S. during the first quarter of 2020. Back in July, Jim Cramer said the doom and gloom around CRE is a real threat but exaggerated, describing it at the time as a “well-overdone crisis” Morgan Stanley’s exposure MS YTD mountain Morgan Stanley (MS) year-to-date performance In reporting its second-quarter financial results, Morgan Stanley said that “increases in provisions for credit losses were primarily driven by credit deteriorations in the commercial real estate sector as well as modest growth across the portfolio.” The bank’s provision for credit losses rose to $161 million in Q2 from $101 million in the second quarter of 2022. Tailwinds spurred by a resurgence in Morgan Stanley’s investment banking (IB) services, however, could offset CRE market weakness going forward. There have been signals of more mergers and acquisitions (M & A) and initial public offerings (IPOs), which could boost this dormant, and crucial, part of the bank’s business. Semiconductor designer Arm Holdings (ARM) had a blockbuster listing earlier this month, the largest IPO since electric vehicle maker Rivian Automotive (RIVN) in 2021. Grocery delivery service Instacart (CART) and marketing automation Klaviyo (KVYO) made Klaviyo mad their debuts shortly after Arm. IB has lagged in recent quarters amid macro uncertainty and recession concerns. The global M & A value declined by 44% in the first five months of 2023, per data analytics firm GlobalData , with firms pulling back on dealmaking in order to preserve capital in the face of an economic downturn. During the Barclays conference earlier this month, management at Morgan Stanley said that capital markets are set to improve next year. This could boost IB broadly because companies will feel less conservative about how they allocate funds. “I would say we are more confident now than any time this year about an improved outlook for 2024,” the team said. “I think it’s clear to us now that the first half of the second quarter was probably the low point in sentiment around capital markets and M & A.” Still, there’s a lot of uncertainty around the U.S. economy as it’s unclear when the Fed will stop hiking interest rates. Academics like Piskorski, however, contend that pressure on traditional investment banking will likely continue. “We’re in a very different environment than two years ago. I would expect much fewer IPOs,” he said. “Cost of capital is much higher. Investor appetite to invest in companies, especially companies that are not profitable, is very different.” Wells Fargo’s exposure WFC YTD mountain Wells Fargo (WFC) year-to-date performance Offices represent around 22% of Wells Fargo’s outstanding commercial property loans and 3% of its entire loan book. It has one of the largest portfolios when it comes to CRE in the country, with more than $154 billion in loans outstanding and $33 billion of that consists of office loans. According to its latest quarterly earnings release, Wells Fargo boosted allowances for losses connected to its commercial property loans, driven mostly by the firm’s exposure to offices, flagging a $949 million increase in their credit loss allowance. However, management said that significant losses have not been observed so far. For context, banks typically boost reserves for credit losses as a preventative measure to curb losses from borrowers who could default on their loans. This, in theory, gives Wells Fargo the extra capital to absorb credit losses during a market downturn or periods of extreme volatility. For context, JPMorgan Chase (JPM) also bulked up its reserves in anticipation of rising office property loan losses. Wells Fargo stands to benefit from its multiyear recovery plan once U.S. regulators decide to lift its asset cap, which would increase its balance sheets, along with its valuation that’s providing a cushion to any downward earnings estimates. Still, it remains unclear when regulators may lift these rules. “The losses are still quite small,” Chief Financial Officer Michael Santomassimo said in July. “We do expect that there will be more weakness in the market, and it’s going to take a while to play out.” CEO Charlie Scharf said the bank sustained “higher losses in commercial real estate, primarily in the office portfolio.” He added, “While we haven’t seen significant losses in our office portfolio-to-date, we are reserving for the weakness that we expect to play out in that market over time.” Still, revenue from Wells Fargo’s commercial real estate business rose to $1.33 billion in the second quarter, up 26% from 2022 and 2% higher from the last quarter. The banking giant attributed the gains to “higher interest rates and higher loan balances.” Wells Fargo may not stand to gain as much as Morgan Stanley from an uptick in investment banking, but the comments made by management during the Barclays conference indicate ongoing signs of recovery for the bank. “A lack of bad news turned out to be good news,” Jeff Marks, CNBC Investing Club’s Director of Portfolio Analysis, said during a Morning Meeting earlier this month. Wells Fargo execs emphasized the bank’s solid forward guidance while signaling an improved efficiency ratio as the Wall Street giant continues to cut costs via various restructuring plans like layoffs. Santomassimo said the macro picture is “much better than people would have expected at this point” as well. (Jim Cramer’s Charitable Trust is long WFC, MS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Collin Madden, founding partner of GEM Real Estate Partners, walks through empty office space in a building they own that is up for sale in the South Lake Union neighborhood in Seattle, Washington, May 14, 2021.
Karen Ducey | Reuters

Banks are facing mounting uncertainty as the commercial real estate (CRE) sector continues to struggle. But, tailwinds in our financial names should help safeguard their bottom lines. More

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, September 26, 2023.
Brendan McDermid | Reuters

A majority of Wall Street investors haven’t taken solace in stocks’ 2023 gains, thinking the market could retreat further as risk of a recession creeps up, according to the new CNBC Delivering Alpha investor survey. 
We polled about 300 chief investment officers, equity strategists, portfolio managers and CNBC contributors who manage money about where they stood on the markets for the rest of 2023 and beyond. The survey was conducted this week.

Arrows pointing outwards

More than 60% of respondents believe the stock market’s gain this year has just been a bear market bounce, seeing more trouble ahead. A total of 39% of investors believe we are already in a new bull market.
The S&P 500 has fallen more than 5% this month alone, cutting its 2023 gains to 11%. Stocks struggled as the Federal Reserve signaled higher interest rates for longer, sending bond yields higher. The market also contended with a rally in crude oil as well as a 10-week winning streak for the dollar. 

Arrows pointing outwards

Asked about the probability of a recession, 41% of survey respondents said they expect one in the middle of 2024, and 23% said a downturn will arrive later than 12 months from now. Only 14% said they don’t expect a recession.
“I think the market is telling us we should expect another hike or two, and the consensus is building higher for longer,” Ares Management CEO Michael Arougheti said in an interview with CNBC’s Leslie Picker.
The Fed kept interest rates unchanged this month but forecast it will hike one more time this year. DoubleLine Capital CEO Jeffrey Gundlach said odds for more rate hikes are higher now in light of the recent jump in oil prices, which could put upward pressure on inflation. JPMorgan Chase CEO Jamie Dimon also warned that interest rates could go up quite a bit further. More

Minneapolis Fed President Neel Kashkari told CNBC on Wednesday that he’s unsure whether the central bank has raised interest rates enough to tame inflation.
He cited various concerns suggesting that “we might not be as restrictive as we otherwise would think.”

Minneapolis Federal Reserve President Neel Kashkari said Wednesday he’s unsure whether the central bank has raised interest rates enough to tame inflation.
Speaking one day after he penned an essay suggesting that rates may have to go “meaningfully higher” from here in order to bring down prices, Kashkari told CNBC that the neutral rate of interest, or one that is neither holding back the economy nor stimulating it, may have moved higher.

“I don’t know,” he said on “Squawk Box” when asked whether the current target range for the federal funds rate of 5.25%-5.5% is “sufficiently restrictive” to bring inflation back to the Fed’s 2% goal. “It’s possible given the dynamics of the reopening of the economy, that the neutral rate may have moved up.”
Some of his concerns stem from the fact that sectors of the economy that normally are affected by rate hikes seem to be ignoring them.
“So one thing that makes me cautious that we might not be as restrictive as we think, is that consumer spending has remained robust, GDP growth continues to outperform,” Kashkari said. “The two sectors of the economy that are traditionally most sensitive to interest rate hikes, autos and housing, have both added some signs of bottoming and in some cases are starting to show some recovery that makes me cautious that we might not be as restrictive as we otherwise would think.”
Those comments come one week after the rate-setting Federal Open Market Committee, of which Kashkari is a voting member this year, opted not to raise interest rates but still signaled another quarter-point hike before the end of the year while cutting its outlook to two reductions next year, half the last projection in June.
Wall Street has been fearful that the continuing tightening of monetary policy could send the economy into recession.

But Kashkari insisted that is not the Fed’s goal.
“If we have to keep rates higher for longer, it’s because the economic fundamentals are even stronger than I appreciate and the [economic] flywheel is spinning,” he said. “It isn’t obvious to me that that means that a recession is more likely, it just might mean that we need a higher rate path to get inflation back down to 2%.”
However, he said “we just don’t know right now” whether the Fed has done enough, adding that “we all want to avoid a hard landing” for the economy. More