No recession signs in US, fears are overblown: Milken’s William Lee

Despite all the noise around tariffs, politics, and debt concerns, the US economy isn’t showing signs of slowing down, says William Lee, Chief Economist and Executive Director at the Milken Institute.

Lee believes the fears of a recession are overdone and markets may be reacting more to headlines than to what’s really happening on the ground.

“The US labour market is in great shape, the GDP numbers that came out, also in the revision, showed that private domestic final sales, that is the amount of consumption and investment spending, is 2.5%. There’s really no sign of recession that all these fear mongering due to tariffs have been putting in the air,” he said. He added that investors should “chill out and really relax” about inflation and slowdown worries.

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Lee is upbeat on India, which holds a “special place” in the emerging market space and is one of the first places he would look at if investing in EMs.

While he continues to back developed markets—especially the US—for long-term innovation-led returns, he believes India is tracking many of the same trends, just at an earlier stage.

China, on the other hand, is facing a tougher time. Lee pointed out that deflation and weak demand are big challenges right now. Trump’s tariffs have put pressure on China’s export-heavy model, and the country will eventually need to shift towards boosting domestic demand. Talks between the two countries, he said, are unlikely to be quick or easy given the many issues involved, from rare earths to market access.

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Lee also mentioned South Korea as a serious contender for global capital. While India is in a strong spot, Korea’s ability to balance ties with both China and the US, and its industrial strength, make it a strong competitor. For India to keep attracting money, he said, ramping up infrastructure spending will be key.