CUNA Chief Economist Mike Schenk discusses the overall health of the economy, the Federal Reserve’s next steps, and the stock market in the latest Economic Update. 

“If you forced me to put a percentage on prospects for recession, I would say, at the moment, maybe somewhere in the neighborhood of 35-40%.  We are looking at all this data on an ongoing basis in real time, adjusting our outlook based on that. But, at the moment, I'm still relatively upbeat,” said Schenk.  

Highlights from the May update include:  

• A “huge buildup” of inventory at the end of last year and heavy consumer spending on imported goods at the beginning of the year hurt GPD, but Schenk predicts the economy to rebound in the second quarter. 

• An active Fed will not necessarily cause a recession. 

• Supply chain disruptions will continue, and overall prices will increase by 5%, due to COVID and the war in Ukraine. 

Schenk also discussed recent stack market trends.  

“Since 2015, the stock market has averaged north of 10% average returns over this entire period of time. That's a pretty decent outcome in the grand scheme of things.  Actually, as a result, that's a bit higher than long run average increases in equities which are on average about 8% overall.”