I'm Coy Wells for U.S. Money Reserve. According to several analysts, the risk of a recession has not abated in 2024, despite increased economic optimism. Jim Reed, the head of global economics for Deutsche Bank, says a recession is likely in 2024. In a note to clients, Reed states despite all signs pointing to a soft landing, history provides reasons for considerable caution.
Reed says the lag effect that interest rate hikes usually have means the past series of rate hikes could still lead to a recession. Reed also argues that data indicates a recession because high consumer and commercial debt is under strain from current financial conditions. While aware of current positive sentiment in market reporting, Reed notes that such optimism is often the case prior to recessions.
Reed is not alone in this view. Billionaire and Double Line Capital CEO Jeffrey Gundlach says that a recession is likely, pointing to the difference between the ten and two year Treasury yields. When yields on the two year Treasury exceed the ten year Treasury yield, it creates a technical signal called the inverted yield curve, which historically has preceded recessions. When the curve de-inverts, Gundlach says, it suggests that a market downturn is imminent.
In an appearance on a January 9th, 2024, webcast, Gundlach said, I think the dollar is going to have big problems in the next recession as a consequence of the policies that we run to try to deal with what could be a very painful recession. Economist Gary Shilling says that a 2024 recession will be particularly strong, and claimed in late December 2023 that a recession in 2024 could cause the S&P to fall as much as 30%.
Consumer is worried about a potential recession may wish to consider adding physical gold to their portfolio. Gold and silver have long been considered safe haven assets in times of economic uncertainty and volatility. To learn more about the benefits of owning physical gold at home, or as part of a gold backed IRA, and to receive your free gold information kit, call U.S. Money Reserve and speak to one of our dedicated account executives today.
