Evercore ISI founder and chairman Edward Hyman reportedly said he doesn't see the economy re-accelerate for a long time because of the lags involved in monetary policy and noted that a pick-up in the first half of 2024 may not be possible.
"It takes a long time for monetary policy to work, like one and two years which is virtually unbelievable. But the Federal Reserve’s pause in the summer of 2006 … let me take you through the time period. The recession started in 2008, eighteen months later. So what I am saying is it might take another 10 months to impact the economy," Hyman told CNBC.
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Soft Landing: Hyman's comments come at a time when the Fed announced a pause in its rate hike campaign during its June policy but indicated it could raise rates by another 50 basis points this year.
However, Wall Street has begun weighing in on the possibility the central bank's aggressive rate hike cycle may be nearing its end. For instance, unemployment data released Thursday strengthened the argument against the Fed hiking rates going ahead.
Hyman also said he believes a soft landing may not be possible citing the yield curve as an input.
"The money supply is contracting for the first time, the most it’s done since the 1930s — that gets my attention. Lastly, in addition to the aggressive rate increases, they have QT going on, which I don’t have a history to study. That’s another, a third leg on the timing side," he said.
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