Despite the commonly-understood definition of a recession as being two consecutive quarters of falling GDP, the U.S. isn't in a recession until the National Bureau of Economic Research (NBER) says so. And despite long-held investor fears of a pending recession, the S&P 500 recently entered a bull market, bolstered largely by major tech growth.
And NBER has not declared a recession. This, according to some experts, is at least partly due to a consistently resilient labor market.
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But Hugh Hendry, a Scottish hedge fund manager who founded Eclectica Asset Management, in response to a tweet featuring the currently inverted bond market yield curve, said that the recession is "already here."
Hendry, who was recognized as Europe’s Best Absolute Return Fund Manager in 2009, followed up with a lengthy list of "real" variables that he thinks supports his perspective.
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Citing, among (many) other things, the persistent yield curve inversion, which is a traditional predictor of a recession, Hendry noted bank failures, "profound risk conservatism at lending institutions," risk-aversion in stocks and inflation as evidence that the recession is not just happening, it's here.
"All I'm saying is that GDP is near impossible to measure over short stretches," Hendry tweeted. "History reveals that almost always the Fed makes decisions on eco data that is revised lower, that makes a mockery of their actions at vital, pivotal points."
Duke University finance professor Campbell Harvey spoke to ABC News about the yield curve, saying, "In the past 50 years, we have seen seven inverted interest rate curves. Each one was followed by a recession."
