The US economy could be in a state of compromise at this point, looking at the aspect that a recent, massive Fed rate cut is an indicator for an incoming US recession, feel economists like Mark Spitznagel, chief investment officer and founder of Universa. The burden of these rate cuts may soon begin to trouble the US economy, and even though this aggressive approach was taken to thwart an impending recession, things could end up being more vicious later on.
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Meanwhile, there is a chance of a major credit crunch, which could be similar to the one seen last in 1928, which had ended up leading to a global recession. It is yet to be seen how the Commerce Industry and Fed Reserve plans on battling these key issues in the coming months.
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There are high chances that the United States could be moving into a recession period, looking at several indicators at his point.
Which is one of the biggest recession indicators in the US?
One of the biggest recession indicators in the United States is the Treasury yield curve, which, when monitored closely, predicts recession chances quite accurately.
Fed 'band-aid' could prove to be costly?
The abrupt and surprising 50 bps rate cut may stop the bleeding of the US economy for now, but this would mount up serious pressure for the US Treasury, which could come under the gun once the toil of these rate cuts begin taking effect. The US Treasury yield curve, which isa major recession indicator, is currently being monitored very closely, and a sharp downturn in the curve could become the warning bell for the US economy.Also Read : Wuhan is in the news again after the COVID-19 outbreak; this time a Chinese attack submarine sank at a shipyard in the city
Is the stock market responding to recession fears?
According to reports, the US stock markets are quite fearful of the current recession fears, and the upcoming US elections in November is simply pouring fuel over the fire. Since US investors hate uncertainty, which is the scariest factor at this point, looking at the increasing political intensity and contest between Donald Trump and Kamala Harris, things at the stock market could play out very dangerously towards the end of the year.Meanwhile, there is a chance of a major credit crunch, which could be similar to the one seen last in 1928, which had ended up leading to a global recession. It is yet to be seen how the Commerce Industry and Fed Reserve plans on battling these key issues in the coming months.
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FAQs:
Is the United States heading towards a recession?There are high chances that the United States could be moving into a recession period, looking at several indicators at his point.
Which is one of the biggest recession indicators in the US?
One of the biggest recession indicators in the United States is the Treasury yield curve, which, when monitored closely, predicts recession chances quite accurately.
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