
A coming recession might not be deep but it will likely be long: David Rosenberg
BNN Bloomberg
The Bank of Canada and the U.S. Federal Reserve have cautioned that future rate hikes are likely as the fight against inflation continues, but one economist says their persistence might cause a long-lasting recession.
Canada’s central bank surprised economists with a rate hike this month, bringing the country’s overnight lending rate to 4.75 per cent. The U.S. Fed held rates at its latest meeting, but Chairman Jerome Powell has warned that future hikes might be necessary to bring inflation to the central bank’s desired two per cent target rate.
These aggressive policy moves to tame inflation will undoubtedly push Canada and the U.S. into a recession that will take a while to come out of, David Rosenberg, president, chief economist and strategist at Rosenberg Research, told BNN Bloomberg in an interview on Wednesday.
“Once a recession starts, they (the central banks) are not going to be easing policy sufficiently to generate the next recovery, so this could be a long recession – not a deep one but a long one,” Rosenberg said. “As an investor that wouldn’t make me feel very good.”