It has been revealed that Cathie Wood predicted the fact that a huge recession will hit the US economy in 2024. Check out the latest reports about this below.
Brace yourselves for a recession
Cathie Wood, the founder of ARK Invest, has made a prediction that the US will experience a recession in 2024. Wood believes that this will be a result of the Federal Reserve’s overly aggressive interest rate hikes.
In a recent update on YouTube, Wood stated that the US economy is currently experiencing a “rolling recession,” which is a downturn that affects specific sectors of the economy at different times.
She further predicted that the economy will officially enter a recession this year, as various economic indicators start to show signs of decline.
“We’ve been in a rolling recession for roughly two years now. The number of housing measures are down 40%. New existing home sales are as low as today as they were at roughly the depths of the 2008-2009 crisis.
We’ve seen auto sales not get back to the normal 17.5-18 million unit range. We’re in that 15.5-16 range, so that’s recession-like.
Commercial real estate is in a world of hurt, and I think what’s going to happen now is, that companies are losing pricing power, and they’re going to have to cut prices. They see that when they don’t cut prices, their units fall apart.”
When the recession hits, the investor predicts that it won’t be as severe as the Great Financial Crisis of 2008. However, it will still be enough to drive the Fed towards a low interest rate environment.
“In order to salvage margins, what will [the companies] do? They will start cutting back on employment, and the unemployment will continue to go up. It’s still at very low levels, but it has turned the corner. I’m not thrilled about that. I just think the Fed overdid it. I don’t think this was necessary but we do think it’s going to happen.
The recession will not be as serious as 2008 or 2009, nothing like it at all, partly because we’ve been through a rolling recession and this will be the tail end of it. So that too, will move the Fed and so we think interest rates are going to surprise on the low side of expectations as inflation and real growth surprise on the low side of expectations – in an election year, so that’s pretty interesting.”
