Where are we in the global economic cycle? I wish I had the answer.

The unwinding of the Fed’s stimulus programs, combined with the risk of a global trade war and rising populism in a number of developed countries, increase the chance that this aging economic recovery could soon turn.

When that happens, the severity of the downturn will depend on the resiliency of the world’s two largest economies: ours and China’s. China may be better prepared. While we loosen financial regulation to achieve faster short-term growth, China is tightening regulation to contain bubbles and achieve sustainable, long-term growth, even if that means slowing its economy in the near-term.