Are we on the brink of a recession? According to investment research firm BCA Research, the answer is yes. In a recent CNBC interview, BCA Research’s chief strategist of global asset allocation, Garry Evans, stated that the economy is showing signs of slowing down, including a “deteriorating” U.S. labor market. This comes as the U.S. unemployment rate reached 4.3% in July, the highest since October 2021, and U.S. manufacturing activity fell to an eight-month low in the same month.
Despite expectations for Federal Reserve rate cuts, Evans believes that a few rate cuts will not be enough to prevent a recession. He explains that on average, it takes about a year for Fed cuts to have a positive impact on the economy. In fact, he suggests that the market’s expectation of a Fed funds rate of 3% by the end of next year (currently at 5.3%) will not happen unless there is a recession.
As traders await the annual economic policy symposium in Jackson Hole, where Fed Chair Jerome Powell is expected to speak, the U.S. economy continues to show resilience amid inflation and elevated interest rates. While the U.S. is not officially in a recession, a survey by Affirm reveals that about 3 out of 5 Americans believe that the country is heading in that direction.
At Extreme Investor Network, we keep a close eye on the economy and provide expert insights to help you navigate these uncertain times. Stay tuned for more updates and analysis on how the economic landscape is shaping up and the potential impact on your investments. Join our community of savvy investors and stay ahead of the curve with exclusive content and interactive discussions.