Caution: 2024 recession risk ‘extremely high,’ comparable to 1980s
The probability of a recession in the United States in 2024 is extremely high, reminiscent of the levels seen in the 1980s. According to the finance and economy expert Game of Trades, the recession probability based on the 10-year/3-month term spread is at its highest since the early 1980s. This indicator reached around 90%-95% for several years during that time. Additionally, banks have been tightening lending standards, which historically has led to a recession since 1990.
Warnings about the possibility of a recession in the US economy have been mounting. Bloomberg’s senior commodities expert Mike McGlone has stated that the likelihood of a recession has grown and that it could be one of the worst economic resets in our lifetimes. Professor Steve Hanke of Johns Hopkins University also believes a recession could strike as early as the first quarter of 2024.
The effects of the recession may also extend to the crypto sector, particularly Bitcoin. McGlone notes that Bitcoin currently shows higher risk than the Dow Jones Industrial Average, which could have bearish implications due to its relationship with the stock market. The United Kingdom is also facing recession fears, with economists warning that the Bank of England’s efforts to control inflation may lead to a recession by the end of 2023.
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In conclusion, the risk of a recession in the United States in 2024 is high, similar to the levels seen in the 1980s. This is based on the 10-year/3-month term spread and the tightening of lending standards by banks. Experts have been warning about the possibility of a recession, and the effects may extend to the crypto sector, particularly Bitcoin. The United Kingdom is also facing recession risks. It’s important to note that investing is speculative and involves risks.
