When Is the Next Recession Coming?

If history helps us to predict the future, a recession can occur when: Wage Growth minus Fed Funds Rate is below -1%.

Why? Because the Fed is too tight at that moment.

Since 1965, a recession has never occurred until Wage Growth minus Fed Funds Rate was below -1% (red line).

We are far away from that today. No immediate recession on the horizon.

Wage Growth minus Fed Funds Rate