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Jul 16, 2022Liked by Claudia Sahm

If the Fed’s aggressive stance increases U-3 by 50bps, is the “Sahm Rule” more like the Taylor Rule or the Heisenberg Principle? Is it an observation or closer to a law of nature?

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Sahm rule has no false positives since the 1970s and has trigger within 2 to 4 months of the recessions start (determined by the NBER later.) before that it only trigger once in the 1950s ahead not within a recession. That said, it is not a law of nature. This time could be different.

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