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Real Vision: Finance & Investing

Is Recession the Only Answer to Inflation?

Real Vision: Finance & Investing

Real Vision

Business News, News, Investing, Business

4.11.1K Ratings

🗓️ 29 March 2022

⏱️ 32 minutes

🧾️ Download transcript

Summary

As Jared Dillian puts it, when the prices of things we need are going higher and the prices of things we want are going lower, “it creates economic misery.” Things we need include fossil fuels and agricultural commodities. Things we want include stocks and bonds. In 2022, with stock and bond prices falling and commodity prices rising, wealth has evaporated, and the cost of living has increased. And the thing is, to seriously take on rising prices, the Federal Reserve is going to have to accelerate its monetary tightening cycle. “In order to stop inflation,” writes Dillian, “the Fed will have to engineer a recession.” We’re starting to see indications from sections of the yield curve that a downturn is imminent – for example, the yield on the five-year U.S. Treasury note exceeded the yield on the 30-year bond earlier today. Stocks, meanwhile, have enjoyed a two-week rally. Is there a way out for the Fed that doesn’t include recession? Dillian, author of The Daily Dirtnap, joins Real Vision’s Maggie Lake for today’s Daily Briefing to talk about the Fed, interest rates, economic misery, and recession. Want to submit questions? Drop them right here on the Exchange: https://rvtv.io/3IMaiNH Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0

Hello, and welcome to the Real Vision Daily briefing. It's Monday, March 28, 2022. I'm Maggie

0:11.0

Lake here with Jared Dillion, editor of the Daily Dirt Map. Hi, Jared. How are you?

0:15.9

Hey, what's up? Not too much. It's good to see you. If we take a look, it's been a little

0:21.5

while since you and I've talked. So I'm really curious to hear what you're thinking

0:25.2

as around these markets. And, you know, if we take a look at the beginning of a new trading

0:29.1

weekend, we had some, it looked like it was going to start out to be a pretty quiet day,

0:32.6

but we actually had some action here, especially when we look at oil down really sharply,

0:37.9

9% on the day. We saw a bid back into risk assets, the NASDAQ kind of picking up steam as we

0:43.8

headed into the close here more than a percent. We saw Bitcoin and Ethereum both up sharply.

0:50.8

Prior to that, it looked like the action was really overseas. We saw in Japan,

0:56.0

the Yen hit a six-year low as the Bank of Japan intervened to keep yields down there.

1:00.9

And the US Treasury looks like it was maybe more the quiet market today with that yield,

1:06.2

the 10-year yield anchored right around 2.46%. So it seems like everyone sort of

1:12.0

tried to figure out what happens from here. What's top of mind for you, Jared? What are you

1:15.8

looking at? Well, I'm kind of in between things right now. You know, when the S&P was down about

1:24.0

12% in sentiment was really negative. You know, in my newsletter, I made a pretty bullish call

1:30.7

to play for a bounce in text docs in particular. I exited that call on Friday and now I'm just kind

1:41.6

of in between ideas. You know, you mentioned oil being down. I should never trade oil.

1:49.1

Like, me trading oil is like the guy that walks up to the poker table and just gets like

1:55.2

busted out every time, like I so I'm not going to make any predictions on oil. But I will say that

2:00.8

it wasn't just oil. A lot of commodities were down across the board today. And you know,

2:05.6

today's rally towards the end of the day was a really big ball crushing rally. Like Vicks,

...

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