Let me start by making two statements:
I do not know when the next recession is coming;
And it is coming for sure!
So what are the warning signs? Of course, there are plenty of articles by economists lately predicting the recession in 2020. According to Wall Street Journal survey, 59% of the economists predict the end of the next recession in 2020. However, we also know that economists predicted 22 recessions out of 11 that took place since 1945.
Are there real recession signs we should watch for? Indeed, the answer is yes, and here are a few very important ones:
The first one is almost obvious and known to everyone – it is the Fed. They are aggressively advertising the rate hikes and we expect 6 more hikes (two more this year and 4 – next year). While they correlate their actions with the actual state of the economy, a previous history shows that many recessions took place during the aggressive interest rate increases.
The second one is not so obvious – it is the risk of the corporate rate bubble. Many, many companies took advantage of very low interest rates and issued an enormous amount of debt (if this sounds familiar and you think about the real estate debt that led to the crisis of 2008).
There are many geopolitical issues that might lead to the recession – but the main one is attributed to the trade wars.