Eric Basmajian, founder of EPB Research, returns to Forward Guidance to share his view on the U.S. business cycle. Basmajian notes that the 2022 decline in economic growth rate turned into a remarkable stabilization of broad coincident indicators of economic activity that began in January 2023 and persisted throughout the spring stresses in the banking system. However, he remains confident that the U.S. economy will enter a recession soon, and he discusses in detail several of his leading indicators that motivate his view. Filmed on September 7, 2023.

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Timecodes:

(00:00) Introduction

(00:44) Pre-Recession Phase Continues

(06:25) Housing And Autos Are Not Slowing Down That Much

(13:19) Consumer Credit Is Still Somewhat Strong (For Now)

(16:17) When Will Recession Come?

(23:11) Pushing Back Against The Recessionary Thesis

(30:14) How Far Will Unemployment Rate Go?

(32:06) Does New Bull Market In Stocks Indicate There Will Be No Recession?

(36:40) Debate On Mechanics Of How Higher Interest Rates Constrain Economic Activity

(39:56) Banking System And Credit Crunch

(52:35) Contraction In Gross Domestic Income (GDI) Is Signalling A Recession

(01:00:23) What Is Eric's Level Of Confidence That U.S. Is Indeed Headed For A Recession?

(01:09:47) Outlook on Rates & Bond Yields