A Fed pause historically means that the recession clock starts ticking and rings in the recession when the Fed starts cutting. The outlook for cuts? That’s properly worth a watch series on its own but with long-end rates below 4%, equity markets making YTD highs, strong corporate profitability and a labor market that still shows strength, we venture to say that those cuts are likely not around the corner.

Chart 1: A pause means the recession clocks start running