Via Bloomie:
“The U.S. Federal Reserve doesn’t typically manage to engineer a soft landing once the unemployment rate has fallen through full employment,” Deutsche said in a research report Monday, noting the U.S. is likely past that point with a jobless rate at just 3.9 percent. “So the next global downturn is more likely to be a matter of when, not if.”
Deutsche estimates that a global recession in mid-2020 would find Australia with a budget barely in surplus, net debt around 17 percent of gross domestic product and the cash rate at about 2.25 percent. In contrast, at the time of the 2008 financial crisis, the budget surplus was 1.8 percent of GDP, net debt was zero and interest rates were at 7.25 percent.
