Market updates and forecasts

Get the latest economic news from ForexMart, including updates on the financial market, central banks' policy announcements, financial indicators, and other relevant news which can have an impact on the industry.

Disclaimer:  Information provided here to retail and professional clients does not contain and should not be construed as containing investment advice or an investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance.

Experts warn about the risk of a recession in the United States in 2022


February, 14 2022
watermark Economic news

Investor and billionaire Jeffrey Gundlach, specializing in bonds, said that the American market has recently seen signs of an economic recession.


In particular, data on consumer sentiment was released on Friday, which fell to a new low in a decade (61.7 points). As a rule, this leading indicator effectively demonstrates where the economy is moving in the future. Gundlach notes that the decline in sentiment, combined with the lack of new economic incentives and the expected tightening of the US Federal Reserve policy, does not bode well.


Another indicator of a recession is the yield curve, which tracks the difference between short-term and long-term interest rates. At the same time, the inversion of the yield curve, in which short-term rates are higher than long-term rates, is considered a clear warning of the inevitability of a recession.


To date, the yield between 10-year Treasury bonds and 2-year Treasury bonds is within 50 basis points. The expert believes that the Fed's current position does not bring much benefit, since the central bank is still expanding its balance sheet by buying bonds and has not yet raised rates. Gundlach believes that the Fed should have stopped quantitative easing a year ago. 


Also, signs of an approaching recession include the beginning of a slow expansion of credit spreads, which indicates a decrease in confidence that some companies can service their debts.


However, despite the negative forecasts, the investor identified one area that could stay afloat – emerging market stocks. To date, this is the only area that can demonstrate strong growth in the near future.


Feedback

ForexMart is authorized and regulated in various jurisdictions.

(Reg No.23071, IBC 2015) with a registered office at Shamrock Lodge, Murray Road, Kingstown, Saint Vincent and the Grenadines

Restricted Regions: the United States of America, North Korea, Sudan, Syria and some other regions.


© 2015-2024 Tradomart SV Ltd.
Top Top
Risk Warning:
Foreign exchange trading carries a high risk of losing money due to leverage and may not be suitable for all investors. Before deciding to invest your money, you should carefully consider all the features associated with Forex, as well as your investment objectives, level of experience, and risk tolerance.
Foreign exchange trading carries a high risk of losing money due to leverage and may not be suitable for all investors. Before deciding to invest your money, you should carefully consider all the features associated with Forex, as well as your investment objectives, level of experience, and risk tolerance.