If U.S. Economy Hits Trouble, It Won’t Be Like 2008
The anxiety might feel familiar, but the threat this time comes from tariffs, not excess investment in any sector.
The pain from a “supply shock” would be different from the busts in tech and housing.
Photographer: Qilai Shen/Bloomberg
This moment’s anxiety may remind investors of the 2001 and 2008 recessions, as markets have now priced in two rate cuts by the end of the year. But this is not the last war, when recession brought investment busts and significant increases in unemployment.
The risks that are front of mind right now are different, mostly about the ratcheting up of tariffs and the threat they pose to supply chains and trade. These dynamics feeding into a "negative supply shock" is the closest thing to recession risk the U.S. faces right now, a scenario that would create different dynamics than the last two recessions.