The Risk Of A Recession Isn't Zero

2025-03-07 05:40:00 ET

Summary

• While the 'recession alerts' from various sources suggest a forthcoming recession, the market continues to trade more bullishly.
• The amount of federal spending injected into the economy was enormous.
• If DOGE is successful in its endeavors to reduce Government spending and, more notably, Government employment, it will reduce the deficit by extracting capital from the economy.

The risk of a recession in the U.S. is not zero. This is particularly true as the current Administration tackles Government bloat and implements tariffs. However, before we discuss why the risk of a recession could increase, it is crucial to remember the 2022 experience. At that time, most economists were convinced a "recession was imminent." As discussed in early 2023, it was the most anticipated recession ever....

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