Illustration: Aïda Amer/Axios

One of the biggest risks to the stock market is the fear of a recession, much more so than a recession itself.

The big picture: Yes there will be a recession, but it's almost certainly not going to be another catastrophic financial crisis, like 2008. It could be very mild.

  • When will the recession arrive? No one has a clue, and if history is any guide, there will be debate even while we’re already in it about whether there will be one.
  • What will a recession mean in practice? Recessions are generally bad for employment, but the jobs situation could deteriorate even without a recession. The market is not a snapshot of the economy, and can easily rise during a recession.

There are warning signs of an economic slowdown, but there's a strong case that a recession could still be several years away.

  • We're not about to collapse under a pile of debt. Household finances are still healthy. Household outstanding debt is about 79% of GDP. It was 125% at its 2009 peak. And while corporate debt has gotten a bit excessive, BlackRock says that debt levels are still manageable.
  • A large crash like in 2000 could hurt, but a simple bear market, with valuations down 20% from their high, would have relatively little effect on the economy.
  • Interest rate hikes have become less of a risk. Fed chairman Jerome Powell has already dialed back his plans for rate hikes in 2019, saying any such hikes will only arrive in response to new data about economic strength. Interest rates are not yet so high as to cause a recession.
  • Hundreds of thousands of long-term unemployed have re-entered the labor force, often at companies where they learn transferable skills, Axios Future editor Steve LeVine noted yesterday. That may juice the entire economy, creating the conditions for higher GDP growth and "a persistent, positive macroeconomic effect," says Jason Furman, former chief economist to President Obama and now a professor at Harvard.

The bottom line: We have nothing to fear but fear itself.

Go deeper

Updated 58 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Politics: Chris Christie: Wear a mask "or you may regret it — as I did" — Senate Democrats block vote on McConnell's targeted relief bill.
  2. Business: New state unemployment filings fall.
  3. Economy: Why the stimulus delay isn't a crisis (yet).
  4. Health: FDA approves Gilead's remdesivir as a coronavirus treatment How the pandemic might endMany U.S. deaths were avoidable.
  5. Education: Boston and Chicago send students back home for online learning.
  6. World: Spain and France exceed 1 million cases.

FBI: Russian hacking group stole data after targeting local governments

FBI Headquarters. Photo: Mark Wilson/Getty Images

Energetic Bear, a Russian state-sponsored hacking group, has stolen data from two servers after targeting state and federal government networks in the U.S. since at least September, the FBI and Cybersecurity and Infrastructure Security Agency said on Thursday.

Driving the news: Director of National Intelligence John Ratcliffe announced Wednesday that Iran and Russia had obtained voter registration information that could be used to undermine confidence in the U.S. election system.

FDA approves Gilead's remdesivir as a coronavirus treatment

A production line of Remdesivir. Photo: Fadel Dawood/picture alliance via Getty Images

Gilead Sciences on Thursday received approval from the Food and Drug Administration for remdesivir, an antiviral treatment that has shown modest results against treating COVID-19.

Why it matters: It's the first and only fully FDA-approved drug in the U.S. for treating the coronavirus.