Are US recession concerns overblown?

It wasn’t hard to figure out what was top of mind in the business and investment community on my recent trip to Singapore. In order, it would be the potential for a US recession, a US recession, and a US recession.

I’m not overstating this. It came up in every meeting I had.

Some raised it as a genuine question, but really, many have already formed their own view. And that view seems to be the US is going to have a nasty tumble over the next year or two, largely due to the impact of rising interest rates.

I don't agree with that.

A technical recession? Maybe. Probably, even. But for me, the more pertinent question is: will it be a deep recession or not? And I don't see a strong case for a deep recession in the US. The panic, in my opinion, is premature.

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Surprisingly, China’s structural slowdown and the tectonic implications of climate change were of less focus.

Most of the focus is on lockdowns and what that means for the economy in the short term. But what many are missing is the data which suggest economies that experience lockdowns tend to see sharp falls in birth rates.

For China, now battling through lockdowns for more than two years, that's an important structural development – and one I think worth paying more attention to.

On climate, there is a sense, I think, of people treating the impact of the crisis in Europe as a bit of a one-off event. But the real lesson is the vulnerability of the global system to these sorts of disruptions.

We’ll see many other potential sources of disruption as we go through this difficult, multi-decade balancing act around shifting the climate.

And we need to think more about that.

Richard Yetsenga is Chief Economist at ANZ