Amid mixed U.S. economic indicators, including the job market, prospects are mixed among investment institutions over the possibility of a U.S. economic slowdown in the future.
According to Bloomberg News on the 12th, some bond investment institutions, including Fidelity International, are calling for caution in investing in risky assets in anticipation of an economic slowdown.
The instability in the banking sector, which surfaced in March amid the aftermath of the aggressive U.S. rate hike, is only a preview of a major crisis, and last week’s “surprise” rate hike in Australia and Canada is still a pressure on the U.S. to raise interest rates.
Bob Michel, CIO of JP Morgan’s asset management division, said in a recent interview with CNBC that the current market is very similar to the “fake” stabilization period in March-June 2008, during the financial crisis, predicting that the situation will be “silence before the storm.”
He said that the recession began 13 months after the rate hike was completed on average since 1980, and predicted that local banks, commercial real estate, and investment ineligible rating companies would suffer.
On the other hand, optimism about the U.S. economic slowdown remains.
Amid eased uncertainties surrounding the federal debt limit, the Standard & Poor’s (S&P) 500 Index on the New York Stock Exchange recently closed its longest bear market since the 1940s and entered a bullish market.
Goldman Sachs economists, including Jan Hachius, recently lowered the probability of the U.S. economy falling into a recession within a year to 25%, and JPMorgan strategist Mako Colanovic said, “The U.S. and global expansion are on a solid foundation, and fears of an imminent recession seem exaggerated.”
Rick Leader, CIO of Global Bonds at BlackRock, the world’s largest asset management company, said last month that the U.S. economy is in a much better condition than the market consensus (average forecast) and expected to avoid a deep recession.
