‘Black Swan’ hedge funder warns a recession is coming this year—and the biggest market bubble in history will soon pop

Article Synopsis
The U.S. economy has defied expectations of a recession despite inflation, rising interest rates, and global conflicts. Wall Street’s bullish outlook sees this as an economic “soft landing,” bolstered by resilient consumers and businesses. However, hedge fund manager Mark Spitznagel warns that the economy is still vulnerable, particularly due to high levels of debt exacerbated by years of loose monetary policy. He believes the delayed effects of the Federal Reserve’s tightening will soon trigger a recession, pointing to the disinversion of the yield curve as a key indicator.
Spitznagel also fears that once the bubble bursts, the U.S. may face stagflation—a period of low growth and high inflation. While he doesn’t predict a depression, he cautions that the measures needed to stabilize the economy will be painful. Despite his bearish outlook, Spitznagel advises against shorting the market, as he expects a final surge in the current bubble.