The threat of a recession in the United States (US) has resurfaced\namid economic pressures and a surge in energy prices. However, the big\nquestion remains the same: when will the recession truly occur?<\/p>\n
Several economists assess the current recession risk as quite high.\nPartner and associate director at Boston Consulting Group, Hady Farag,\nstated that market participants are beginning to prepare for that\npossibility.<\/p>\n
\u201cPeople are preparing for the reality that we are already in a\nrecession now or there is a high likelihood we will soon be in one,\u201d he\nsaid, as quoted by CNN International on Tuesday (31\/3\/2026).<\/p>\n
This concern is exacerbated by high energy prices, which have\nhistorically often served as an early indicator of recessions.\nAdditionally, US President Donald Trump\u2019s economic policies, from\ntariffs to immigration, are seen as adding to the uncertainty.<\/p>\n
Portfolio strategist at Richard Bernstein Advisors, Dan Suzuki,\nhighlighted the growing market anxiety over the potential economic\nslowdown. \u201cFinancial markets are increasingly showing signs of fear of a\nrecession,\u201d he said.<\/p>\n
Nevertheless, history shows that recession predictions often miss the\nmark. In the past eight years, economists have warned of potential\nrecessions almost every year, but it only truly happened once, in 2020,\nwhen the Covid-19 pandemic triggered a brief but sharp global economic\ncontraction.<\/p>\n
In 2022, for instance, high inflation, a surge in oil prices due to\nthe Russia-Ukraine war, and aggressive interest rate hikes by the US\ncentral bank convinced many that a recession was inevitable. Even\nBloomberg\u2019s model once projected a 100% chance of recession in the next\n12 months. Yet, the US economy held firm until 2025.<\/p>\n
This phenomenon has given rise to several theories. One is the\n\u201crolling recession,\u201d where weakness occurs only in certain sectors,\nwhile others continue to grow.<\/p>\n
Dean of the business school at Notre Dame de Namur University, John\nM. Veitch, explained that this condition makes the recession feel\nuneven. In fact, it may have already occurred several years ago.<\/p>\n
\u201cPeople ask when the recession will come. If you are in the high-tech\nsector, it happened three years ago,\u201d he said, referring to the\npressures in the technology sector in 2022.<\/p>\n
Additionally, the \u201cK-shaped\u201d theory indicates that high-income groups\nremain able to spend, thereby supporting overall consumption even as\nlow-income groups face pressure.<\/p>\n
There is also the factor of \u201cfront-loading expenditure,\u201d where the\nthreat of tariff policies prompts businesses and consumers to accelerate\nspending before the policies are implemented, thus supporting economic\ngrowth in the short term.<\/p>\n
Meanwhile, EY-Parthenon\u2019s Chief Economist, Greg Daco, estimates the\ncurrent probability of a US recession at around 40%. This risk could\nrise significantly if geopolitical conflicts, particularly in the Middle\nEast, worsen.<\/p>\n
\u201cThere is a real risk of recession,\u201d said Long. \u201cBut you don\u2019t want\nto be the economist who predicts disaster.\u201d<\/p>\n
With the various uncertainties in place, the US economy is now seen\nas at a crossroads. Although signs of slowdown are increasingly visible,\nthe long-predicted recession has yet to truly materialise.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/when-will-the-recession-truly-arrive-in-america-1774972312", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }