As the U.S. approaches the 10th year since the start of this economic expansion, the economy is showing signs of entering the later innings of the business cycle. As measured by industrial production, capacity utilization and durable goods, real economic activity in the U.S. remains expansionary. The labor market is strong with unemployment near 50-year lows and wage growth at cycle highs. However, housing, auto manufacturing and select business sentiment and consumer confidence surveys have hit some soft patches. The closely followed 3-month 10y UST spread has recently inverted, an early warning signal that recession could be on the horizon. (Figure 1) Overseas, the economic data have been decelerating for almost a year, particularly in Europe and China.