The most predicted recession ever maybe won’t happen. Get ready for the ‘asset class recession’

The most anticipated recession in recent U.S. history might not be as imminent as once thought, if historically low unemployment sticks around the way it has been. CEOs seem to have wised up to this, with a huge dip in mentions of a looming economic downturn during recent earnings calls. But Wall Street is not Main Street, and the stock market took a historic beating last year, and strategists are warning not to be fooled by the market’s gains in the first half of 2023, largely driven by the “black swan event” of ChatGPT and generative A.I. But some investors are warning about a different kind of recession that has to do with how much of Main Street really has piled into equities: an asset class recession.

More from Fortune: 5 side hustles where you may earn over $20,000 per year—all while working from home Looking to make extra cash? This CD has a 5.15% APY right now Buying a house? Here's how much to save This is how much money you need to earn annually to comfortably buy a $600,000 home

An asset class recession means essentially that the economy as a whole would not shrink—and unemployment may not go up much from its recent 50-year low—but markets and asset values would take a prolonged hit, and most of the pain would be focused on those who rely on the value of their investments in addition to or instead of their salaries. Stocks in particular have made up a bigger and bigger chunk of U.S. households’ financial assets in recent years. In fact, Americans haven’t been invested in the stock market at this rate since 2008.

Stock ownership now touches 61% of U.S. households, the same rate as in 2008, according to a Gallup poll released Wednesday.

Americans abruptly shedded their reliance on stocks as they lost $7.4 trillion in stock wealth between July 2008 and March 2009, according to the Federal Reserve, the equivalent of each U.S. household losing $66,200 on average.

The decline in market values during the crisis likely derailed or delayed the plans of many new potential investors, Gallup found, resulting in a decade of relatively low stock ownership rates. Between 1998 and 2008, the average stock ownership rate was around 61%, while in the decade following 2009, around 54% of households on average held stock. Ownership rates bottomed out at 52% in 2013 and 2016.

Stock ownership rates have been steadily ticking up since 2020, however, and those who waded back into the market since then have likely made a splash, as the S&P 500’s value has risen by more than 27% since the beginning of 2020.

America’s love/hate affair with stocksBut the near future may not be as promising for stock owners. A year of rising interest rates, a banking crisis, and a standoff over the U.S. debt ceiling that could conceivably cause the government to momentarily default on its debt have dampened confidence in the market.

And despite a rally early this year that has boosted the S&P 500 around 7%, some top Wall Street analysts have warned that the brief respite could end as yet another bear market trap. Mike Wilson, Morgan Stanley’s chief U.S. equity strategist who correctly predicted last year’s market selloff, warned in a note this week that various economic risks—including the debt ceiling debate—are likely to keep the bear market alive a little while longer.

If the market spirals once again it could lead to what Marc Rowan, billionaire investor and CEO of Apollo Management, a private equity firm, called a “non-recession recession” in an interview with CNBC earlier this month, a downturn in asset values that does not lead to the same economic woes traditionally seen during a recession.

“Asset prices are coming down,” he said. “We in the financial markets who benefit and live in an asset world, we’re going to feel like we had a real recession. Rates went up—going up as much as they have, we’re going to feel it.”

Rowan was joined in his assessment by Apollo’s chief economist Torsten Slok, who wrote in a note last week: “The big correction during this recession will not be in the economy but in asset prices as the Fed continues to deflate the buy-everything bubble created due to global easy money.”

Slok wrote that 15 years of low interest rates and money printing had created a “significant bubble” for asset prices, while the Fed’s battle to tame inflation will likely keep capital costs high next year as well.

“A mild economic recession with a big recession in asset prices is what we call a non-recession recession,” he continued.

To be sure, this asset class is still concentrated in households that are already wealthy, according to the Gallup poll, which found that stock ownership “correlates most strongly with household income.” While 80% of Americans with a household income above $75,000 own stock, that share shrinks to around half when it comes to middle-income Americans earning between $30,000 and $74,999, and less than a quarter of Americans who earn under $30,000 own any stock at all.

This story was originally featured on Fortune.com

More from Fortune: 5 side hustles where you may earn over $20,000 per year—all while working from homeLooking to make extra cash? This CD has a 5.15% APY right nowBuying a house? Here's how much to saveThis is how much money you need to earn annually to comfortably buy a $600,000 home
Click Here To Get Funded!