Business Insider: The Fed Just Unloaded a Pile of Evidence U.S. Economy is in the 9th Inning

When I discuss that we are late cycle and use the baseball analogy, the two responses I get the most are “We’re going into extra innings” or “It may be the eighth or ninth, but the innings are getting much longer, so the fat lady ain’t gonna be singing for a long, long time.”

Wishful thinking. A clear case of hope triumphing over experience.

And it has little to do with the expansion heading into Year 10, as it is rather obvious that we spent considerable time this cycle just climbing ourselves out of the deep hole, and massive spare capacity, left over from the Great Recession.

What it has to do with is a closed output gap. The labor market hitting the wall. Wages accelerating, which both crimps profit margins and generates some moderately higher inflation that then kicks the Fed into a higher gear. In other words, the business cycle is far from dead, even if dormant for an extended period.

Continue to read Rosenberg’s analysis on the Fed’s Beige Book for Business Insider.