Is another economic recession on the way? Some economists are worried it might be.
“One of the biggest concerns is the housing market,” Stifel’s chief economist Lindsey Piegza said on CNNMoney’s “Markets Now” show on Wednesday. “It’s throwing up a very large red flag and suggests maybe this 4% growth we saw in the second quarter is not sustainable.”
CNNMoney reports that paychecks are remaining stagnant while housing prices grow and home sales decline. Those who can afford to buy homes are taking on a considerable amount of debt to get them, which is what happened leading up to 2008’s Great Recession.
“We’re not there yet, but this is what led us to the housing crash,” Piegza said.
There are also concerns about the yield curve, which represents what it costs to borrow money at any given time. An inverted yield curve is a predictive indicator of a recession that has come before every one we’ve seen in modern history. The curve occurs, NBC News reports, when short-term interest rates are higher than long-term ones.
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