Carlos and Bob discuss the economic outlook for 2019, from the perspective of Austrian business cycle theory. The yield curve is close to inverting, and if it continues we should expect a recession by the end of 2019 or, failing that, almost certainly in 2020. There are two types of Fed tightening during this recovery, namely interest rate hikes and a rolloff of the Fed's bonds. Powell can't indefinitely postpone the bond rolloff because as interest rates rise, the Fed is paying ever more billions in interest to the commercial banks. Mentioned in this episode: The minutes of the Jan 29-30, 2019 Federal Reserve meeting. The June 2017 addendum to the Federal Reserve statement, describing some particulars of the impending bond rolloff program. The Bob Murphy Show, episode 17, featuring Alex Tabarrok (who does not think the Fed has set us up for an inevitable crash). The audio production for this episode was provided by Podsworth Media.