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Are Recession
Risks Rising? Article by Brian Higginbotham, Senior Economist,
US Chamber of Commerce
The past year has produced near its historical high and despite increased
several periods of heightened volatility has performed quite well in recent
uncertainty and increased financial months. The Dow Jones Industrial Average, for
market volatility. Between the yield example, has increased more than 10% since the
curve inverting, tariffs rising, and start of the year.
slightly weaker job growth, you’d be
forgiven if you thought the economy The bond market, by contrast, is signaling a
was already in the middle of a severe recession. Longer-term bond yields have recently
recession. Despite the recent bouts dropped below rates for shorter-term notes (i.e.
of pessimism, the U.S. economy is the yield curve inverted). The inverted yield
still growing at a modest pace and curve, according to the Federal Reserve Bank of
the prospects for the remainder Cleveland, is pointing to a 37.9% probability of
of the year, at minimum, appear recession by September 2020, down slightly from
reasonable. Yet confusion reigns. August (45% probability) but up significantly
over the past few months. This estimate is
This is evident in the stock and consistent with projections from private
bond markets, which are currently forecasters, who place a one-in-three probability
telling two different stories about of a recession in a year. The modest improvement
the future course of economic reflects a recent rebound in the 10-year Treasury
growth. The stock market is note. While it remains inverted relative to the
13 AmCham South China
Are Recession
Risks Rising? Article by Brian Higginbotham, Senior Economist,
US Chamber of Commerce
The past year has produced near its historical high and despite increased
several periods of heightened volatility has performed quite well in recent
uncertainty and increased financial months. The Dow Jones Industrial Average, for
market volatility. Between the yield example, has increased more than 10% since the
curve inverting, tariffs rising, and start of the year.
slightly weaker job growth, you’d be
forgiven if you thought the economy The bond market, by contrast, is signaling a
was already in the middle of a severe recession. Longer-term bond yields have recently
recession. Despite the recent bouts dropped below rates for shorter-term notes (i.e.
of pessimism, the U.S. economy is the yield curve inverted). The inverted yield
still growing at a modest pace and curve, according to the Federal Reserve Bank of
the prospects for the remainder Cleveland, is pointing to a 37.9% probability of
of the year, at minimum, appear recession by September 2020, down slightly from
reasonable. Yet confusion reigns. August (45% probability) but up significantly
over the past few months. This estimate is
This is evident in the stock and consistent with projections from private
bond markets, which are currently forecasters, who place a one-in-three probability
telling two different stories about of a recession in a year. The modest improvement
the future course of economic reflects a recent rebound in the 10-year Treasury
growth. The stock market is note. While it remains inverted relative to the
13 AmCham South China
