Our view has been that we have been in an elevated period of risk for the US to enter a recession, however one has not officially occurred. We say officially because recessions are only known with certitude in hindsight, and we have not been informed by the NBER, The National Bureau of Economic Research that one officially occurred. However, if one examines the two quarters of negative GDP growth in 2022 and the poor performance of equities over the period, we may in fact already had a recession.
As the economy existed Covid and the associated demand pull and supply constraint realities that it caused we saw a number of fits and starts play out through various sectors of the economy. That condition has been described by some as a rolling recession.
On a prospective basis higher rates and their impact on consumer spending, the restarting of student loan payments in October, and the significant contraction we are seeing in credit creation by banks all could act as governors on economic growth in the future and precipitate a recession.
