Are we close to a recession now? There is a lot of concern out there now, 10 years after the crisis, that the typical US cycle does not last for decades. My answer to that is, expansions don’t die a natural death. Australia may be an exception with positive growth now for 25 years. Usually, expansions end because of economic or financial vulnerabilities exacerbated by a variety of policy mistakes. We are probably not going to have a global recession this year, but there is a buildup of excessive debt in the US.
And it’s not just corporate in the US. There is also a buildup of household debt, including student loans and auto loans. And even housing is showing some weakness given the rise in mortgage rates and changes in tax laws that make housing investment less beneficial.