Recession risks are rising, as consumers become more pessimistic.

In recent months, the 10% richest households have accounted for an unusually large share of household spending, making the recent stock market correction even more worrisome.

In early 2022, forecasters thought the pace of recovery too swift and a slowdown in consumers spending would take the economy south, but a recession didn’t materialize.

So now, where are investors to look for a Black Swan—the event that could turn the recent correction into a full scale rout—I suggest six places to cast a watchful eye.

First, the massive spending on artificial intelligence and data centers could evaporate if another disruptor like China’s DeepSeek upends investor confidence in those bets and deflates big-tech stocks. That would pose major risks for aggregate demand, a recession and prolonged bear market.

Second, bird flu threatens global food supplies and could spawn another epidemic.

A recent variant caused the hospitalization of a Canadian teenager and a death in Louisiana. Signs of the virus have turned up among three American veterinarians.

It’s not comforting that the Secretary of Health and Human Services is a vaccine denier, the Center for Disease Control and Prevention is enduring disruptive staff cuts and a Biden era contract with Moderna to develop bird flu shots is being reevaluated.

Third, after the Global Financial Crisis, bank regulations were tightened, loans became tougher to obtain and many businesses turned to private credit where aggregators like Apollo Global Management, Ares Management and Blackrock. Those collect pools of money from private investors and sovereign wealth funds to make loans deemed too risky for conventional FDIC-insured deposits.

Now banks like J.P. Morgan have become exposed by directly entering the market or lending to aggregators seeking to leverage their investors’ funds.

All this is not supposed to create risks for FDIC-insured deposits. But so were the fabled Structured Investment Vehicles that repackaged dodgy real estate loans to sell to private investors and precipitated the GFC.

Fourth, commercial real estate is finally turning over, because private investors believe rental markets are stabilizing, and banks can no longer extend loans on office buildings whose occupancy rates have fallen thanks to Work From Home.

Many of the CRE mortgages are held by regional banks—the same sort of smaller institutions that were central to the Savings and Loan Crisis of the late 1980s.

The critical thing to understand is that both private credit—by intent and design—and CRE mortgages—by virtue of an unforeseeable pandemic and new WFH technology—are inherently risky and many banks are vulnerable.

The Trump Administration promises much lighter bank regulation but also more political intervention into the regulatory process. The latter could prove a genuine peril to financial stability.

Fifth, since 2016 the federal deficit has grown from 2.9 % of GDP to 6.6%, and the House framework for renewing the 2017 Tax Cut and Jobs Act and funding the president’s agenda could well above 7%.

A national debt soon exceeding 100% of GDP and advancing at perhaps 3% a year is causing investors to demand higher yields on U.S. Treasuries. Last fall, as the Fed cut the federal funds rate a full percentage point, yields on critical benchmark 10-year Treasuries rose.

Investors demanding increasingly higher interest rates on long Treasuries to compensate for heightened inflation risks could undermine the dollar’s reserve currency status, reduce Americans’ ability to consume 3% more than they produce and force the federal government to cut back spending and raise taxes. One or in combination of those could instigate another Great Recession.

Sixth, President Donald Trump wants to emulate President William McKinely, whose tariffs increased protection to the levels that rivaled the 1930 Smoot-Hawley tariffs. The former preceded the Long Depression of the 1890s and the latter likely exacerbated the Great Depression.

Just the threat of new tariffs is encouraging trading partners to seek greater autonomy in agriculture and other key industries and businesses to expensively rearrange supply chains.

Much like the McKinley, Mr. Trump’s tariffs those will push prices of everyday goods out of range for many households.

Supply disruptions and reduced real incomes, profits and the like could easily instigate a recession and stock market collapse.

His economics team must be aware of this history and these risks, but cautions premised on this knowledge may not be welcomed by a president who requires absolute loyalty to his agenda.

Mr. Trump’s arbitrary, personalized and quixotic policymaking is at odds with formulating tax and regulatory reforms that foster investment and growth and the predictability businesses and investors require to make sound choices.

A Black Swan may be hatching in the West Wing right now.

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Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.