We are likely to see an increase in interest rates in the coming months. This will cause the price of money to drop, increasing the price of holding onto cash and reducing its attractiveness as a safe haven. This will be accompanied by an increase in borrowing costs for business. The next recession will be here soon, and Covid-19 is not going away. Inflation is never transitory, with a large increase in income and no increase in output. And many people are increasing their incomes without increasing their output. This means a slowdown may well be upon us, as early as the 2nd half of 2022, though if this divergence continues into 2024, then we may well be experiencing another recession by then.

A strong indicator of the sustainability of an expansion is its length. This column looks at the argument of whether the length of the expansion may provide insight into when the next recession will likely occur in the United States. The two-year look-ahead prediction is derived from the assumption that it takes one year for an economy to recover from a typical recession, and another year for a new business cycle to begin. For more details on economic update, refer to the info-graphic.