Uploaded October 2023 | Updated September 2026, 47 minutes ago
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In today's video, we're diving deep into a recent Deutsche Bank study that says a recession is coming to the USA 100%, based on four recession indicators.
Predicting a recession is no walk in the park, given the many variables at play-think geopolitics, like the Ukraine conflict or global pandemics.
But according to Deutsche Bank, they're sounding the alarm bells, claiming the likelihood of a U.S. recession is at a whopping 100%.
They're warning of an imminent boom-and-bust cycle that we can't avoid.
To back up their claims, Deutsche Bank's Jim Reed, the head of global economics and thematic research, analyzed 34 recessions dating back to 1854.
They've pinpointed four key macroeconomic triggers that have historically caused recessions.
Now, let's dig into these triggers, and you'll see the hit ratios as we go.
First up, we have rapidly rising interest rates. Over the past 18 months, we've witnessed a significant hike in interest rates, going from near-zero levels in March 2022 to a staggering 5.5% by September 2023. Historically, when short-term interest rates have risen by 2.5% over 24 months, there's been a recession within three years-about 69% of the time. The chart resembles an elevator ride, and this steep climb is concerning.
Next on the list is rising inflation, which currently stands at 3.7% year-over-year as of August 2023, up from 3.2% the previous month. Deutsche Bank finds that a 3% inflation rise over two years triggers a recession in roughly 77% of cases.
The third indicator is the infamous inverted yield curve. It's when short-term interest rates exceed long-term rates for loans of the same risk profile. This anomaly has a strong correlation with recessions, with 74% of cases signaling a downturn. We've been in an inverted yield curve since mid-2022, as seen in the Fred chart, and it's something to keep a close eye on.
Last but not least, soaring oil prices have jumped around 30% since June, reaching over $94 a barrel. However, this indicator is less likely to predict a recession in the U.S., with a 45.9% correlation when oil prices spike 25% over a year.
Now, let's not forget the geopolitical factors at play, such as the Israel-Hamas situation and tensions between Russia and Ukraine, which can add unpredictability to the mix.
In conclusion, while these recession indicators are flashing red, it's essential to approach this information with a level head.
Low unemployment is currently propping things up, but any changes there could trigger a recession. We're in uncertain territory, and it's crucial to stay informed and make well-informed decisions tailored to your unique circumstances.
If you found this video valuable, please hit the like button, subscribe, and share it with a friend who might benefit from this information.
Your support keeps this channel going. Thanks for tuning in, and remember, have a prosperous day!
Master the 4 Pillars of Wealth by joining WhiteBoard Finance University Today!
Use code "UHOH20" to get 20% OFF FOREVER!
👉 wbfuniversity.com
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⮕ whiteboardfinance.com/go/m1-finance-training
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⮕ whiteboardfinance.com/go/stockmarket4beginners
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ABOUT ME 👇
My mission is to provide my viewers with actionable content that enables them to create financial wealth. My videos reflect my real-world experience as a real estate investor, stock market investor, student of finance, and entrepreneur.
This channel allows me to share my passion for personal finance, stock market investing, real estate investing, and entrepreneurship. I produce content that I would want to watch, and because of that, I give 100% effort to every video that I make. I also believe in complete transparency and open communication with my audience.
Get free life insurance quotes from America's top insurers and start saving today with Policygenius: Policygenius.com/whiteboardfinance. Thanks to Policygenius for sponsoring this video!
JOIN MY SCHOOL HERE: 👉 wbfuniversity.com
Use code "UHOH20" to get 20% OFF FOREVER!
In today's video, we're diving deep into a recent Deutsche Bank study that says a recession is coming to the USA 100%, based on four recession indicators.
Predicting a recession is no walk in the park, given the many variables at play-think geopolitics, like the Ukraine conflict or global pandemics.
But according to Deutsche Bank, they're sounding the alarm bells, claiming the likelihood of a U.S. recession is at a whopping 100%.
They're warning of an imminent boom-and-bust cycle that we can't avoid.
To back up their claims, Deutsche Bank's Jim Reed, the head of global economics and thematic research, analyzed 34 recessions dating back to 1854.
They've pinpointed four key macroeconomic triggers that have historically caused recessions.
Now, let's dig into these triggers, and you'll see the hit ratios as we go.
First up, we have rapidly rising interest rates. Over the past 18 months, we've witnessed a significant hike in interest rates, going from near-zero levels in March 2022 to a staggering 5.5% by September 2023. Historically, when short-term interest rates have risen by 2.5% over 24 months, there's been a recession within three years-about 69% of the time. The chart resembles an elevator ride, and this steep climb is concerning.
Next on the list is rising inflation, which currently stands at 3.7% year-over-year as of August 2023, up from 3.2% the previous month. Deutsche Bank finds that a 3% inflation rise over two years triggers a recession in roughly 77% of cases.
The third indicator is the infamous inverted yield curve. It's when short-term interest rates exceed long-term rates for loans of the same risk profile. This anomaly has a strong correlation with recessions, with 74% of cases signaling a downturn. We've been in an inverted yield curve since mid-2022, as seen in the Fred chart, and it's something to keep a close eye on.
Last but not least, soaring oil prices have jumped around 30% since June, reaching over $94 a barrel. However, this indicator is less likely to predict a recession in the U.S., with a 45.9% correlation when oil prices spike 25% over a year.
Now, let's not forget the geopolitical factors at play, such as the Israel-Hamas situation and tensions between Russia and Ukraine, which can add unpredictability to the mix.
In conclusion, while these recession indicators are flashing red, it's essential to approach this information with a level head.
Low unemployment is currently propping things up, but any changes there could trigger a recession. We're in uncertain territory, and it's crucial to stay informed and make well-informed decisions tailored to your unique circumstances.
If you found this video valuable, please hit the like button, subscribe, and share it with a friend who might benefit from this information.
Your support keeps this channel going. Thanks for tuning in, and remember, have a prosperous day!
Master the 4 Pillars of Wealth by joining WhiteBoard Finance University Today!
Use code "UHOH20" to get 20% OFF FOREVER!
👉 wbfuniversity.com
My FREE M1 Finance Training Video:
⮕ whiteboardfinance.com/go/m1-finance-training
My FREE Stock Market For Beginners Guide:
⮕ whiteboardfinance.com/go/stockmarket4beginners
GET MY HOME AFFORDABILITY SPREADSHEET HERE:
⮕ patreon.com/whiteboardfinance
ABOUT ME 👇
My mission is to provide my viewers with actionable content that enables them to create financial wealth. My videos reflect my real-world experience as a real estate investor, stock market investor, student of finance, and entrepreneur.
This channel allows me to share my passion for personal finance, stock market investing, real estate investing, and entrepreneurship. I produce content that I would want to watch, and because of that, I give 100% effort to every video that I make. I also believe in complete transparency and open communication with my audience.
