The often-changing mood of the stock markets is now reaching the U.S. political scene where President Donald Trump is celebrating each S&P 500 new record high while his Democratic opponents take advantage of any decline to attack him.

Just as Cyceon warned in July that anticipating with excessive optimism several Fed rate cuts was risky, the question of whether the U.S. is on the verge of economic recession results from a debate as hysterical as inaudible. Let us keep calm and relativize by reminding that few data, apart from the inverted yield curve, currently confirm an impeding recession.

The U.S. economy is doing better than ever and major statistics such as unemployment, consumption and credit are satisfactory. Theoretically, it is certain that the United States will eventually go into recession after ten years of economic expansion but it is very difficult to know when.

The real debate should therefore focus on the economic cycle and where in the current cycle is the U.S. economy, with particular attention to the credit cycle in the unprecedented context of historically low if not (soon?) negative rates.

Contents published on do not constitute investment advice.


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