I have been warning that 2019 bears disturbing patterns to that of 2003, and that it is likely within five years a major recession will take place, most likely around 2023 based on my own individual patterns of study.
I am just one person, and like all people, I have my own points of emphasis. Indeed, one should always seek the opinion of multiple people on serious matters, such as a recession or finances. I don’t pretend to be any sort of a “financial advisor,” but simply an observer of what are obvious trends.
Now a major corporation, Bank of America, has admitted that based on the current financial state, there is a 1 in 3 chance of a serious recession:
Recession risk is rising, according to Bank of America.
Based on the most recent data, the bank’s global economist now sees a greater than 30% chance of a recession in the next year.
“Our official model has the probability of a recession over the next 12 months only pegged at about 20%, but our subjective call based on the slew of data and events leads us to believe it is closer to a 1-in-3 chance,” Bank of America’s head of U.S. economics Michelle Meyer said in a note to clients Friday.
Uncertainty around the U.S.-China trade war and a global economic slowdown have caused interest rates to tumble and weighed on the major stock averages in recent weeks. Last month’s jobs report showed a strong consumer, but business investment is low as investors and business owners juggle new tariffs and fiscal policy uncertainty.
Alongside this “policy ping pong,” Meyer said some economic indicators are “flashing yellow,” signaling a coming recession.
For one, the yield on the 10-year Treasury yield dipped below the yield on the 3-month, inverting part of the yield curve. This inversion, although a recession indicator, is not as worrisome as an inversion of the 2-year yield and the 10-year yield, which has yet to occur.
Meyer also said that three of five economic indicators that track business cycles — auto sales, industrial production and aggregate hours worked — are at levels reached right before previous recessions.