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Guest Commentary: Signs Point to Recession Risk

| May 26, 2022

During times like this when markets (both stocks and bonds) are falling at historic rates, interest rates are spiking, and the economy is on uncertain footing – we field a lot of questions about what’s next. What’s next for the economy, housing, and the markets? It’s a natural question, as we all enjoy the comfort of certainty, especially when it comes to our financial well-being. The truth is that we don’t know what’s next, nor does anyone. Just the other day we were lamenting how very intelligent and experienced minds can look at the same data set and come to very different conclusions. Some are convinced a significant recession is coming soon. Others say a mild recession in 2024 or later. Some believe the markets aren’t done falling. Others think we’ve hit the bottom for this cycle. Some believe housing prices are going to crash, while others see a slowing but stable housing market for years to come.

Rather than again state our opinions and observations of what we’re seeing, we’re going to do what we’ve sometimes done in the past. We’re simply going to share one well-considered viewpoint we recently came across from a very highly regarded economist – Liz Ann Sonders at Schwab. This piece looks at recession risk at it stands today. Sharing it is not a whole-hearted endorsement of everything stated therein (though much of it certainly resonates). Instead, it’s simply a way of sharing good data that you may not otherwise be seeing and allowing you to draw your own conclusions. Of course, we’re here to be a sounding board and are more than happy to share our opinions, so feel free to reach if you have questions or comments as you digest this info.

Lastly, and most importantly, we want to extend our sincerest gratitude to those who have paid the ultimate price and those family members left behind as we approach this Memorial Day. Your sacrifice is never lost on us, and we hope and pray the freedoms you or your loved ones helped secure endure for generations to come.

So without further ado, you can access this piece in PDF form using the link below:

Signs Point to Recession Risk (Schwab Asset Management, May 20, 2022)