Trade fears add to concern that a downturn will come sooner rather than later

Why Trump's tax cuts could backfire
Why Trump's tax cuts could backfire

The bull market just celebrated its ninth birthday, and the economic expansion turns 9 this summer.

Will either live to see 10?

Worries about a US-China trade war have rattled investors this week. Investors are also concerned that faster rate hikes by the Federal Reserve may hurt earnings growth and slow stocks and the economy.

Another concern is that President Trump's tax cuts could cause the economy to overheat, and lead to a steeper decline.

Some analysts are even starting to whisper about a recession sooner rather than later. After all, the economy is arguably due for a pullback: The Great Recession, which began in December 2007, officially ended way back in June 2009.

In a survey this week by Bank of America-Merrill Lynch, 74% of fund managers said they believe the world economy is in the latter stages of the recovery — the highest reading ever.

Michael Arone, chief investment strategist at State Street Global Advisors, said in a recent report that investors have been binging like the greedy children in "Charlie and the Chocolate Factory."

And he fears that few are prepared for the sugar high to end. Things certainly didn't end well for Augustus Gloop and Veruca Salt.

"There are a number of things in play that could accelerate the timing of a US recession," Arone said in an interview with CNNMoney, noting that "poorly timed" stimulus from Washington — namely the tax cuts — could lead to a growing budget deficit and higher inflation.

He does not think a recession is likely this year, but he does think one could begin in 2019. That's earlier than many other economists are expecting.

Arone added that the Fed is in a tough spot.

"If they continue to raise rates at their current pace, the Fed could prematurely end the economic expansion," he said.

Not everyone is convinced that a recession is around the corner.

Related: Worries grow that the world is on the brink of a trade war

Larry Hatheway, chief economist at GAM, thinks the bigger risk right now is that rate hikes could cause a market slump -- but not a full-blown economic downturn.

"The Fed's monetary policy could be viewed as more restrictive," Hatheway said. "There are signs that earnings growth may be peaking."

But Hatheway concedes that the biggest wild card is what happens next in the trade spat between the United States and China.

"There are concerns about the impact of a trade war on broader consumer and business confidence," Hatheway said.

Trip Miller, managing partner at the hedge fund Gullane Capital Partners, agreed that people should be nervous about the possibility of the world's two largest economies getting into a nasty trade spat.

Miller noted that top CEOs, such as FedEx (FDX) chief Fred Smith, have raised concerns about the tariffs against China. Smith said on an earnings call this week that history has shown that economic protectionism is "counterproductive." Miller agrees.

"I'll be very blunt. I think Trump is wrong. Trade wars are not a good thing," Miller said. "This is clearly a bad idea. It's not really forward thinking. Some of the smartest guys in business are really worried about this."

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