The thing that makes this one worth noting is that it includes a timeframe.
“Conventional estimates understate the likely impact on economic activity from the trade war and DOGE cuts. This implies that growth will slow more than expected,” Berezin said.
Berezin outlined three key underpinnings to his prediction.
First, higher tariffs hammer real incomes of workers, which slows demand. Two, the shoddy way tariffs policy is being handled is raising public and business uncertainty. And lastly, tariffs are likely to push up inflation and make the Federal Reserve less willing to cut interest rates.
I am pretty sure a recession is coming, but I wouldn’t want to put such a specific time frame on it. All the reasons are true: business is nt going to invest with such uncertainty about tariffs, government workers being laid off in droves, and higher prices as are sure to result from tariffs - whenever they are finally implements and to what extent and on what products - there’s not a single thing there that’s likely to be positive.
But it could happen quickly, like next month, or it might grow a-festering and not happen for 6 months, possibly even a year. (I doubt it will be that long.) The market is toppy, uncertainty is the enemy of growth, and tariffs reduce economic activity. Don’t know when, but yeah, book it.
Expect the NBER to be closed very soon. Why? They are the ones who call recessions, depressions, and so on. No NBER, no govt report on status of economy based on facts.
I think we have noted before the economy is slowing. Many consumer businesses are saying that. The numbers have been supported by AI and tech stocks. But if that slows the numbers can easily turn negative.
Investors are clearly worried. The issue remains will it happen? How bad will it be? How long will it last?
If they change how GDP is calculated and reported you will never know it is happening. Which is the entire reason they are doing that. We will be in a recession within 90 days. We won’t have any way to measure it however. Kind of like “if we just stop testing we won’t have a COVID problem”.