On The Mark: Is the US Headed for a Recession?

May 16, 2022

After stellar economic growth in 2021, the US economy declined 1.4% in the first quarter of 2022. This was the first contraction of the economy since the beginning of the economic recovery in 2020. The S&P 500 is down 12.9% for the year through April 2022 and is off to its third-worst start in history. Bonds using the Bloomberg US Aggregate Bond Index, are also down -9.5%.
This performance is largely due to record high inflation, with all eyes focused on the Federal Reserve (Fed). Investors are concerned that the Fed may not be able to tame inflation without causing economic damage. This concern has led investors to worry that a major recession is right around the corner. While it’s true that the potential for a recession is greater, it is far from a foregone conclusion. This edition takes a look at some of the reasons why the risk of a recession, while possible, remains low in 2022.