In today’s episode of The Daily Windup, we break down what the latest Federal Reserve Beige Book is really saying — and why it’s sending a chilling warning most investors are ignoring. According to the Fed’s own field reports, economic activity has “declined slightly” across three-quarters of the U.S., with only a handful of districts showing modest growth. The tone of this Beige Book is weaker than December 2007 — the start of the Great Recession. Even the Fed’s internal staff now estimates a 50% chance of recession, while the market continues to price in 0% risk. In short: the data is flashing red, but Wall Street’s acting like it’s business as usual.
Key Takeaways:
The Fed’s Beige Book reveals that ¾ of the U.S. economy is stagnating or contracting in real time.
The report’s tone is weaker than the Beige Book from the start of the 2008 crisis.
Even the Fed staff pegs recession odds at 50%, yet the market is still pricing in zero risk.
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