Nov
02
Deutsche Bank: This Measure of Household Finances Could Spur the Next U.S. Recession
ByWhy the post-crisis rise in U.S. households’ net worth might be a bad thing.
Those sanguine about U.S. recession risk aren’t looking in the right place.
While standard measures of the real economy — from inflation to the labor market — nurture the Fed’s optimism that the U.S. economy can withstand the impact of rate hikes, Deutsche Bank AG’s chief economist Joseph LaVorgna sounds the alarm on financial excesses.
Specifically, a negative feedback loop from financial markets to the real economy could push the U.S. into recession, he says. He cites the ratio of U.S. household net worth to disposable personal income, which is now close an all-time record high, indicating net worth is growing faster than expendable earnings…
Deutsche Bank: This Measure of Household Finances Could Spur the Next U.S. Recession
