Bloomberg News predicted through its own model that there is a 100% chance of an economic recession in the U.S. within the next 12 months.
According to the news agency on the 17th (local time), Bloomberg economists Ana Wong and Elizabeth Winger’s team recently predicted that the US is 100% likely to be in recession by October next year. This is up 35 percentage points from 65 percent in the previous survey. The Bloomberg economic model analyzes 13 macroeconomic and financial indicators to diagnose future economic conditions between 1 month and 2 years.
In addition, the news agency pointed out that such a prediction would be unwelcome news for U.S. President Joe Biden, who has stressed that his country’s economic slowdown will be “very mild” even if there are few or no economic downturns. President Biden is attracting domestic investment through the Inflation Prevention Act (IRA) in preparation for next month’s midterm elections.
The news agency also asked 42 economists about their economic prospects in the next 12 months. The survey showed a 60 percent chance of an economic recession 12 months later, up 10 percentage points from the same survey a month ago, the news agency reported.
Meanwhile U.S. benchmark interest rates are likely to rise to 9% if the U.S. inflation continues, renowned investor Mark Mobius said on the 17th (local time).
According to Bloomberg, Mobius, co-founder of Mobius Capital Partners, said in a Bloomberg TV interview that if inflation (price rise) is 8%, the benchmark interest rate should be higher than this, which means 9%.
He explained that if consumer prices fall, policymakers will not be able to raise the key interest rate so aggressively, but prices are unlikely to fall soon.
He then warned that investors should be particularly careful about investing in raw materials because there is a possibility of slowing demand.
He observed that investors in emerging economies or eurozone countries (19 countries using the euro) that buy raw materials should also pay attention to the strong dollar, and that raw material prices could fall.
