The U.S. stock market has been growing strongly this year, with the S&P 500 index recently setting a historic record of over 5,000 points. However, this rally is fueled by players' irrational fear of missing out on gains rather than by the real state of the US economy. Recession is possible, and even in its mildest form it would bring down the S&P 500 by 30%. Such a warning was voiced by the chief investment strategist at B. Riley Wealth Management Paul Dietrich, whose words are reported by Business Insider.

The economic situation in the "wonderland" is not so rosy, the expert notes. Unemployment over the past year has shown steady growth. Consumer spending is high, but there are signs that Americans are paying with credit cards in conditions of increased inflation - according to the Federal Reserve, the debt of households reached a record $17.5 trillion. During the global crisis, retail sales collapsed after consumers ran out of borrowed funds; a similar situation is occurring now - on Thursday they showed the sharpest decline in almost a year.

In addition, lower inflation does not mean the economy is resilient - it was not high during recessions of the past 25 years, Dietrich pointed out.