Economic warning signals are intensifying: Will the Fed ignore indicators of a possible recession?

Macroeconomist Henrik Zeberg has focused on a concerning scenario for the U.S. economy: the Federal Reserve’s inaction in the face of increasingly alarming economic data. According to Zeberg, these indicators suggest a recession risk that cannot be overlooked.

Labor Market Data: An Alarm Signal

The numbers don’t lie. The unemployment rate in November reached 4.6%, the highest figure recorded in the past four years. This metric is a significant red flag, dangerously close to the threshold set by the Sahm Rule, which has historically served as an early indicator of an economic recession.

Recession Risk on the Horizon

Zeberg estimates there is a 40% chance of recession, a probability that should not be underestimated in the current macroeconomic context. The alarming aspect, according to the analyst, is that the Federal Reserve seems to be ignoring these critical signals, when precisely this type of warning should prompt a coordinated policy response.

Changes in Economic Correlates

The economist also pointed out significant changes in the macroeconomic correlations of Bitcoin, a phenomenon that reflects broader uncertainty in financial markets. These correlation shifts are symptomatic of an economy under stress, where assets are repositioning in anticipation of turbulence.

Implications Beyond the Financial Sphere

Zeberg also expressed concern about how economic instability could negatively impact other aspects of public policy, including regulatory efforts aimed at countering terrorism financing. A prolonged recession could divert resources and attention from these strategic priorities.