Scott Sperling, THL Partners co-CEO, joins ‘Squawk Box’ to discuss the latest market trends, why he still sees a high probability of a recession over the next 6 to 9 months, the impact of China slowdown and Fed’s rate hike campaign, the private equity landscape, and more. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

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In today’s uncertain economic climate, the possibility of a recession is a topic of great concern for many investors and business professionals alike. Scott Sperling, co-president of THL Partners, a private equity firm, believes there is still a high probability of a recession looming.

Sperling’s opinion carries weight as he has extensive experience in the private equity industry, overseeing numerous successful investments throughout his career. With a keen eye for market trends and economic indicators, his insights shed light on the potential risks that lie ahead.

One factor that Sperling highlights as a potential catalyst for a recession is the global trade tensions. He points out that the ongoing trade dispute between the United States and China has created significant uncertainty and volatility in the global markets. As these two economic powerhouses continue to impose tariffs on each other’s goods, it could lead to a decrease in trade volume and hurt economic growth worldwide.

Another concern Sperling expresses is the mounting corporate debt levels. Over the past decade, corporations have been taking advantage of the low-interest-rate environment to borrow money, often to finance stock buybacks and mergers. While this has fueled economic growth in the short term, it has also resulted in increased debt burdens for many companies. If interest rates were to rise significantly, these heavily indebted companies could struggle to service their debts, potentially leading to defaults and a domino effect on the wider economy.

Sperling also raises the issue of a potential slowdown in consumer spending. Despite recent strength in the labor market and a robust economy, there are indications that consumer confidence may be waning. Household debt levels, rising healthcare costs, and stagnating wage growth are all factors that could dampen consumer sentiment and subsequently decrease spending. As consumer spending accounts for a significant portion of the economy, any significant decline in this area could have far-reaching implications.

While Sperling acknowledges that the current low-interest-rate environment can provide some cushion against a recession, he believes it is essential to remain cautious and prepared for potential downturns. He emphasizes the importance of active risk management and diversification across investment portfolios to mitigate the impact of a recession.

In conclusion, Scott Sperling of THL Partners warns that although the economy has shown strength in recent years, there is still a high probability of a recession on the horizon. Global trade tensions, corporate debt levels, and potential slowdowns in consumer spending are all factors that contribute to his concerns. With his wealth of experience and expertise, investors and business professionals should take heed of Sperling’s insights and ensure they are well-positioned to weather any storm that may lie ahead.