A piece from Goldman Sachs economists assessing the risk of a recession for the US

Current expansion already the third longest in US history

  • We find that many pre-WW2 recessions originated in the financial sector, many post-WW2 recessions were caused by oil shocks and monetary policy tightening, and sentiment-driven swings in borrowing and investment led to recessions in both eras.
  • Some common contributors to past recessions look less worrisome today.
  • The dominant cause of post-war US recessions-rapid rate hikes in response to high inflation, often boosted by oil shocks-is less threatening today due to the anchoring of inflation expectations and the rise of shale

GS assesses

  • a 1/4 chance of recession over the next two years
  • somewhat below the unconditional probability over two years of 1/3 since 1980