Cathie Wood Predicts US Recession in 2024 Due to Aggressive Interest Rate Hiking
According to Cathie Wood, the founder of ARK Invest, the US will experience a recession in 2024. Wood attributes this downturn to the Federal Reserve’s overly aggressive interest rate hikes. In a recent YouTube update, Wood stated that the US is currently in a “rolling recession,” which affects specific sectors of the economy at different times.
Economic Data Points Towards an Official Recession
Wood believes that as economic data begins to show signs of distress, an official recession will occur this year. She highlighted several indicators, such as a 40% decline in housing measures and existing home sales being at their lowest since the 2008-2009 financial crisis. Wood also mentioned that auto sales have not recovered to pre-crisis levels, and commercial real estate is suffering.
Impact on Companies and the Federal Reserve’s Response
If a recession does hit, Wood predicts that it won’t be as severe as the 2008 crisis but will still prompt the Federal Reserve to pivot towards a low interest rate environment. To protect their margins, companies may resort to cutting back on employment, leading to increased unemployment rates. Wood believes that the Fed’s aggressive interest rate hikes were unnecessary and expects rates to surprise on the low side of expectations due to lower inflation and real growth.
Hot Take: Cathie Wood Warns of Impending US Recession
Cathie Wood, founder of ARK Invest, predicts that a recession will hit the US economy this year. She blames the Federal Reserve’s aggressive interest rate hikes for this downturn. Although the recession won’t be as severe as the 2008 crisis, it will push the Fed towards a low interest rate environment. Wood believes that companies will cut back on employment, leading to increased unemployment rates. She argues that the Fed’s actions were unnecessary and expects interest rates to surprise on the low side of expectations. This prediction comes as various economic data points towards an official recession.
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