Here’s the thing about the stock market right now: it’s acting like that friend who thinks they’re invincible after a few lucky breaks. You know the type—they’ve dodged a couple of bullets and suddenly think they’re Neo from The Matrix.
The US economy has been on quite the streak. We’ve survived the fastest rate hikes in history, weathered tariff scares, and basically laughed in the face of every recession prediction since 2022. The result? Investors are getting a little too comfortable, and that’s making some smart money folks nervous.
“It’s like a theoretical concept,” says Tom Essaye from Sevens Report Research, talking about recessions. “Everybody keeps warning about it, but it never actually happens.” And honestly, he’s got a point. The 2020 recession lasted about as long as a TikTok trend, and then we got the mother of all market booms.
But here’s where it gets interesting (and slightly terrifying): the job market is starting to show some cracks. Job growth has been pretty anemic for four months straight, unemployment is creeping up, and job openings are falling faster than crypto prices in a bear market. Even Fed Chair Jerome Powell admitted there’s “meaningful weakness” in the job market—and when the Fed chair starts using words like “meaningful,” you know it’s not just a flesh wound.
Yet the stock market? It’s hitting new highs like it’s training for the Olympics. The CBOE Volatility Index is chilling at historically low levels, and CNN’s Fear & Greed Index is screaming “Extremely Greedy.” It’s giving major late-90s vibes, and not in a good way.
Christine Sol from SEIA puts it perfectly: “We’ve had the fastest rate hikes in history and still no recession. The tariff shock and the rapid pullback and recovery, but still no recession.” She’s telling her clients to play both offense and defense because, let’s face it, nobody wants to be the person who got caught with their pants down when the music stops.
The problem isn’t that a recession is definitely coming—it’s that everyone’s acting like they’re impossible. David Rosenberg from Rosenberg Research thinks economists are gun-shy about calling recessions because they got burned making those calls in 2022 and 2023. “Nobody wants to call for the recession because of the embarrassment of missing the call,” he says.
This whole situation has serious dot-com bubble energy. Sure, today’s AI profits are real (unlike those wild internet valuations from 1999), but the underlying attitude is eerily similar: “What could possibly go wrong?”
The scary part isn’t that complacency causes recessions—it doesn’t. The scary part is that when you’re not prepared for something, it hits way harder than it should. It’s like not wearing a seatbelt because you’ve never been in a car accident.
So while everyone’s celebrating this economic resilience (and rightfully so—it’s been impressive), maybe it’s worth remembering that business cycles haven’t been repealed. They’ve just been on vacation. And when they come back, you’ll want to be ready.