Economist David Rosenberg Warns of ‘Crash Landing’ and Recession, Citing Fed Data – Economics Bitcoin News
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David Rosenberg, a prominent economist, has issued a warning of a possible crash landing and recession in the near future. He has cited data from the Federal Reserve to support his argument.
Rosenberg, the founder of Rosenberg Research and Associates, made this warning in a recent interview with Yahoo Finance’s “The Final Round”. He highlighted that there are several key indicators that suggest the economy is in a precarious position.
One of these indicators is the inverted yield curve, which is a situation where short-term interest rates are higher than long-term rates. This suggests that investors are pessimistic about the future and are demanding higher returns on short-term investments.
Another indicator is the declining rate of industrial production, which fell 0.6% in August 2019, the biggest drop in a year. This suggests that manufacturing activity is slowing down, which could have a ripple effect throughout the economy.
Rosenberg also pointed to the decline in the Institute for Supply Management’s (ISM) Purchasing Manager’s Index (PMI) to 47.8 in September, the lowest since 2009. This suggests that business activity is slowing down and could lead to a recession.
Rosenberg cited data from the Federal Reserve, which shows that there has been a decline in liquidity in the repo market, where banks lend to each other to maintain their reserve requirements. This indicates a shortage of cash in the financial system, which can have a negative impact on the economy.
Rosenberg warned that the combination of these factors could lead to a crash landing for the economy and a possible recession. He advised investors to be cautious and consider diversifying their portfolios to protect against potential losses.
In conclusion, David Rosenberg’s warning should not be taken lightly. While the economy has been growing steadily for a decade, there are several indicators that suggest it may be heading towards a recession. Investors should heed Rosenberg’s advice and take steps to protect their portfolios against potential losses.
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