The word recession is starting to appear more and more often not only in the media, but also in the statements of the most important institutions and people in the world. Recently, the International Monetary Fund and the World Bank warned of a global recession, and now also the CEOs of the largest banks are echoing.
Recession in the USA?
JPMorgan Chase CEO Jamie Dimon told CNBC on Monday that the US economy "is still doing well" but expects it to enter a recession in the next nine months, BBN reported.
Dimon warned that high inflation and rising interest rates, as well as the uncertainty surrounding the war in Ukraine, are "very, very serious things that I think will probably push the United States and the world - I mean Europe is already in recession - and they're likely to put the United States into some kind of recession six to nine months from now. "
Several US Federal Reserve officials said that the US could still avoid recession, and some stressed that even if the economy slipped into a recession, the bank should not stop at rate hikes.
Source: Conotoxia MT5, US500, Weekly
What do Fed officials say about economic growth?
Federal Reserve vice chairwoman Lael Brainard said on Monday that the US central bank's move to tighten monetary policy would have a full impact on economic activity "in the coming quarters" and its pressure on prices "may take longer," the BBN news service said.
"The transmission of tightening policies is most evident in highly interest-rate-sensitive sectors such as housing," but the "moderate demand" that the Fed wants to see across the US economy, "so far has materialized only partially," she explained in a speech out of 64. The annual meeting of the National Association for Business Economics in Chicago, Illinois. Due to rising interest rates and changes in general financial conditions, "rebound in the second half of the year will be limited" and "real GDP growth will be broadly flat this year," Brainard said in a statement quoted by the BBN.
Recession -what could it mean for the markets?
Looking at business cycles, the documented economic recession phase could be characteristic of the late bear market phase. This may mean, in turn, that previously markets were in a bear market awaiting a recession. When this one actually shows up, the bear market may be in its final stage. Nevertheless, the bottom of a bearish market may also depend on how long the recession will last, how many quarters it will take, and how deep it will be.
Daniel Kostecki, director of the Polish branch of Conotoxia Ltd. (Cinkciarz.pl investment service)
The above commercial publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of April 16, 2014. It has been prepared for information purposes and should not constitute the basis for making investment decisions. Neither the author of the study nor Conotoxia Ltd. are responsible for investment decisions made on the basis of the information contained in this publication. Copying or reproducing this work without the written consent of Conotoxia Ltd. is prohibited.
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