He predicted the 2008 recession. Hear his predictions for the economy this year

You correctly called the recession around 2008 and you were early to the soft landing camp. This time around. Are you still very confident that the US economy is going to avoid a recession this year? I’m pretty confident. I do give a probability. It’s a judgmental probability, but nevertheless, I try to quantify just how confident I am. And right now we’re saying a 15% probability. That the economy will enter a recession in the next 12 months and you should think of 15% as sort of an average recession probability because in the post war period there has been a recession about once every seven years. Yeah, that’s not a tiny number, but it’s a number that is well below the consensus estimate. If there are surveys on this and they currently still say that most forecasters have something in the high 30s or 40% range for. Recession probability? What are the wild cards, either positive or negative, that sort of keep you up at night when you think about whether or not your forecast will match U with reality? While the wildcards tend to be and the shocks tend to be negative, I mean in some ways the absence of shocks is often the positive scenario. If there are no shocks, then I think economies tend towards things getting better, people engaging in more transactions, you know, people getting hired. Business is starting when when you’re in a sort of Placid environment. So almost by definition, I think shocks are negative. Now what am I worried about? Geopolitics would certainly be on the high up on the list where we live in a much more unstable world with military conflict, with the war in Ukraine, with the the war in the Middle East, with more tensions between the US and China, you know, et cetera, et cetera. So far the economic impact, especially on EU, has been relatively limited, but you could certainly imagine that. Widening of the war in the Middle East would become more of an economic issue and much, you know, much bigger commodity shock, much bigger transport price shock. Again, so far what we’ve seen falls well short of the sort of shock that would create a recession. But but that’s that’s high up on my list. And then I’d also say they’re of course always unknown unknowns. It’s hard to sort of give a long, long answer about that. But you know, only to say that the shock that occurred 4 years ago was kind of the most extreme version of an unknown unknown that we have, we have seen in many decades, if not ever.