Wall Street traders are fond of saying that the consensus economic view is seldom proved correct. Today’s stronger-than-expected GDP numbers and inflation’s welcome deceleration offer yet another example of where the consensus view has proved wrong. They also give reason to think that the current economic consensus that we will avoid a meaningful recession this year could prove wide of the mark.

The past few years have not been good for economists. In 2020, almost all economists failed to anticipate the deepest U.S. economic recession in the postwar period. They failed to anticipate this even when it was known China had a serious COVID-19 problem. In 2022, most economists failed to anticipate inflation’s surge to a multi-decade high of 9 percent. They bought into the notion that inflation was but a transitory phenomenon caused by supply-side disruptions rather than by an excessively loose monetary and budget policy stance. Never mind that the government was engaged in the largest peacetime budget stimulus on record, and the Fed was allowing the broad money supply to balloon 40 percent between the beginning of 2020........

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