For an economist, few phrases raise more skepticism than "this time is different." It usually signals denial at the tail end of a cycle. But Ryan Severino, BGO's chief economist and head of U.S. research, argues the current moment may actually warrant the exception.
In an interview with GlobeSt.com, Severino says the economy's recent resilience—despite persistent recession forecasts—stems from something fundamentally atypical: the absence of the internal imbalances that usually trigger downturns.
"It wasn't this durable excess demand situation," Severino tells GlobeSt.com, referring to the wave of recession predictions that followed the inflation surge. "It was a temporary function of a supply-demand imbalance." As supply chains normalized, the pressure eased, helping the economy sidestep what many expected would be a deeper and more prolonged contraction.
That pattern echoes what played out in 2022, when spikes in inflation and unemployment fueled fears of a downturn that ultimately proved short-lived. The difference, Severino suggests, is that the underlying economic structure never became overheated as it typically does late in a cycle.
"What's happened as a consequence, in addition to trade wars, you haven't had debt building excessively the way they normally would," he adds. The labor market has remained relatively balanced, while inflation and borrowing have stayed contained. At the same time, central banks and financial institutions have shifted toward easing rather than tightening.
Excessive debt, runaway inflation, and aggressive rate hikes are the usual precursors to recession. "We went through that and didn't get a recession. My argument is because those imbalances haven't built up, the economy still has room to run here," Severino says.
That does not mean risks have disappeared. "Is [a recession] possible? I never rule out anything in economics," he adds.
Still, the current expansion—now approaching six years—looks different from past cycles. In a recent post on his The Chief Economist blog, Severino wrote, "At this stage of a typical cycle (nearly six years into an expansion), we would expect to see notable imbalances building underneath headline growth. But we do not see the usual imbalances emerging, at least not yet."
Instead of internal excesses, today's pressures are largely external. "First it was a function of tariffs, which was a policy decision," he further tells GlobeSt.com. "A lot of it is coming through due to energy. I don't want to minimize the seriousness of war and people dying, but it was a function of that, not the economy." Even so, both consumer and business spending have held up.
External shocks could still weigh on growth, but Severino draws a distinction between a slowdown and a full contraction. "Could they slow the economy down to 1% growth? Sure. But to really cause the economy to go into a recession, it would take something fairly significant. It could happen, but it wouldn't be from inflation being hot for six months or so."
Risks remain, including public debt levels, the scale and trajectory of AI investment, private credit expansion, nonbank leverage, geopolitical instability, and lingering inflation uncertainty. Even so, Severino believes the broader economic backdrop leaves room for a continued recovery in commercial real estate after several subdued years.
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