📊 Sahm Rule: A "crystal ball" or a smokescreen for recession?
Hello everyone! Today we are going to talk about the hot topic recently - the Sahm Rule.
The Sahm Rule was proposed by former Federal Reserve economist Claudia Sahm in 2019 and is said to be an indicator that can be used to predict recessions. But the question is, is the Sahm Rule really reliable?
🔍 Let's first talk about the historical confirmations that have been obtained in the past. The Sahm Rule can indeed confirm the existence of a recession in the past recession cycle, but the problem is that it has never successfully predicted any recession in advance. Therefore, some people believe that this is actually like hindsight!
At the same time, there is also a view that the Sahm Rule was only proposed in 2019. Although the previous recessions can now be inferred based on this rule, the Sahm Rule did not successfully predict any signs of recession in advance. Therefore, we don't have to worry too much!
🤔 My personal opinion is that although many people are discussing the Sahm Rule now, don't forget that even the founder of the rule, Claudia Sahm, said that despite the weaker-than-expected economic data in recent days, the Fed does not need to cut interest rates urgently. Does this mean that the current data does not match her economic indicator, or are we over-interpreting it a bit?
📉 However, the market has been volatile in recent days, and everyone is looking for a signal that fits with it. But don't forget that true wisdom lies in comprehensive analysis, not relying on a single indicator. The Sahm Rule may be a valuable reference tool, but it has not yet proved itself to be a reliable prophet.
💬 So, here comes the question:
- What do you think of the Sahm Rule? Is it a magic weapon for predicting economic recessions, or is it just a coincidence?
- Will you rely on such economic indicators when making investment decisions?
Share your thoughts in the comments section, and let's discuss how to look at market signals more intelligently!
