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The path to a 2019 downturn

The chances that the U.S. will fall into recession have increased sharply in the last two weeks. Here’s how it could happen, according to Neil Irwin of The Upshot:

• “The trade wars and a breakdown in international economic diplomacy cause businesses around the world to pull back.”

• “This leads to further tumbles in markets and job losses, prompting American consumers to become more cautious.”

• “High corporate debt loads create a wave of bankruptcies.”

• “And central bank policy proves impotent, combined with fiscal policy that is nonexistent.”

“Chances of a near-term recession are only about one in three, in the view of most forecasters,” Mr. Irwin adds. “But if it does develop, the big question will be whether the usual tools to fight it are up to the task.”