The real risk of a recession, and other key points about the US economy right now

Updated Sun, Jul 6, 2025, 11:48 AM 16 min read

A version of this article first appeared at TKer.co

Writing TKer is a process. I first catch up on news and research, and I see what topics are being debated. Then I settle on an angle. Then I draft the newsletter. Then I edit. Then I have an editor take a look. Then I think about the editor’s notes. Then I make some tweaks. And then I send out the newsletter to you.

Going on a podcast or YouTube show as a guest is totally different. While the hosts usually flag topics in advance, I often can’t predict where the discussions will take us.

That can lead to some unexpected exchanges: about connections between religious traditions and investing advice, how AI is shaking up my job, and even some lessons from a hypothetical ice cream shop.

Below are some points you might find thought-provoking. If you haven’t listened to any of these great podcasts before, I encourage you to check them out during the summer lull.

Aside from my expectation that the stock market will be much higher years from now, I don’t like to make too many predictions about the markets or economy.

But last Monday, Investopedia’s Caleb Silver asked me for a prediction or "hot take'" for the next six months. Here’s how I answered:

I'm not gonna say this is a baseline scenario, and I don't like to commit too much to predictions. But I think that there is very much a real risk that the U.S. economy goes into recession at some point this year. It might already be there. It might happen sometime during the summer. It might happen during the fall. I don't know if it's going to be particularly deep. But even with a lot of the economic data still positive, a lot of it has also been cooling. And we were just talking about all the uncertainty out there. I think it's possible that we hear about the economy going into recession — maybe a short and shallow one. I’ll add this sort of curveball to it: I think it’s possible that that happens, and I also think that it's possible that the stock market continues to set new highs. And then we're gonna have a lot of think pieces at the end of the year talking about why the stock market and the economy are not the same thing.

The once-hot economy has become far less "coiled," and it’s reflected by numerous economic metrics that have cooled. Again, I wouldn’t say that recession is my base-case scenario. But I definitely think the near-term risk of going into recession is the highest it’s been in years.

To be clear, this does not mean I’d dump stocks. It’s incredibly difficult to time these trades.