According to Seema Shah, the chief global strategist for Principal Asset Management, the US economy will enter a recession, likely at the end of this year. Though she says it could be mild and short-lived.

Shah joined the What Goes Up podcast to discuss why she thinks there will be a downturn, and why it could last just two quarters.

Earnings have come down and could continue to do so, she says, which may “weigh on asset prices.” And while the labor market looks strong right now, she warns that it’s a lagging indicator and could weaken fairly quickly. 

“I know a lot of people out there who are expecting recession—they expect it to come in Q3. I look at the labor market, the strength of it, and I say that that's almost impossible,” Shah says. “By Q4, we would expect fairly mild negative growth, and then in Q1, a deeper downturn. But then by Q2, this is back to recovery. So this is historically a very short recession and historically a very, very mild recession.”