‘Soft Landing’ Is Out. ‘Growth Recession’ Is In.

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 3 September 2022

⏱️ 17 minutes

🔗️ Recording | iTunes | RSS

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Summary

This episode is sponsored by Nexo.io, Chainalysis and FTX US. Today NLW looks at the shifting Fed narrative. We’ve moved from “soft landing” to “softish landing” to “growth recession” as the goal for monetary policy. With the jobs report coming in slightly stronger than expected, what does it suggest for the September Fed meeting? - Nexo is a security-first platform where you can buy, exchange and borrow against your crypto. The company ensures the safety of your funds by employing five key fundamentals including real-time auditing and recently increased $775 million insurance on custodial assets. Learn more at nexo.io. - Chainalysis is the blockchain data platform. We provide data, software, services and research to government agencies, exchanges, financial institutions and insurance and cybersecurity companies. Our data powers investigation, compliance and market intelligence software that has been used to solve some of the world’s most high-profile criminal cases. For more information, visit www.chainalysis.com. - FTX US is the safe, regulated way to buy Bitcoin, ETH, SOL and other digital assets. Trade crypto with up to 85% lower fees than top competitors and trade ETH and SOL NFTs with no gas fees and subsidized gas on withdrawals. Sign up at FTX.US today. - I.D.E.A.S. 2022 by CoinDesk facilitates capital flow and market growth by connecting the digital economy with traditional finance through the presenter’s mainstage, capital allocation meeting rooms and sponsor expo floor. Use code BREAKDOWN20 for 20% off the General Pass. Learn more and register at coindesk.com/ideas. - Enjoying this content? SUBSCRIBE to the Podcast Apple: https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M= Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW - “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with today’s editing by Eleanor Pahl and research by Scott Hill. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. Music behind our sponsors today is “Razor Red” by Sam Barsh and “The Life We Had” by Moments. Image credit: Rudzhan Nagiev/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.

Transcript

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0:00.0	Welcome back to The Breakdown with me, NLW.
0:09.2	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:14.8	The breakdown is sponsored by nexus.i-o, chain aliasis, and FtX, and produced and distributed by CoinDes.
0:22.9	What's going on, guys? It is Friday, September 2nd, and today we are talking about
0:27.6	growth recessions. Before we get into that, however, if you are enjoying the breakdown,
0:32.5	please go subscribe to it, give it a rating, give it a review, or if you want to dive
0:36.3	deeper into the conversation,
0:42.3	come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. Also, a disclosure as always. In addition to them being a sponsor of the show,
0:47.3	I also work with FTX. All right, folks, well, this morning we got the new jobs numbers. And as we've discussed before,
0:56.1	jobs data represents one of the key pieces of information for the Fed as they determine how
1:01.0	aggressive they're going to be about their plan to raise rates and tighten monetary policy.
1:05.8	If jobs numbers came in soft, that might make them think that the impact of tighter monetary
1:10.3	policy is finally
1:11.5	working its way through the economy and having the cooling effect that they're looking for.
1:15.9	If, on the other hand, data shows that the labor market remains tight, with employment levels
1:20.1	really high, this could be a signal that the Fed could tighten even further.
1:24.6	Now, for some context, in July, we had a surprise to the upside when over 500,000
1:30.2	jobs were added. The Biden administration immediately used this as evidence that all this recession
1:35.0	talk was just a bunch of hooey. However, as I discussed in a show around that time, the top line
1:40.2	numbers hit a lot more questionable data underneath. It turns out that we added lots and lots
1:45.0	of part-time jobs and lots and lots of people taking on second jobs. When it came to full-time jobs,
1:50.8	we actually saw a reduction by about 70,000. This to me reads like a situation where some people
	...

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