Despite Optimism, History Shows High Risk of Recession on Horizon
• History shows recession risk remains high despite recent optimistic economic data and market rally • There's typically a long lag before rate hikes impact the economy; recession risk now higher than 2022 or 2023 based on empirical data • Soft landing talk has spiked before previous recessions in 2001 and 2008 • Inverted yield curve since July 2022 signals investors are nervous about near-term future • Geopolitical tensions high with Russia's war, Middle East conflict; presidential election year and budget deficit also risks