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US Economy Faces Recession Risk In Coming Years, Expert Warns
NDTV
The US economy faces recession risks with potential for a 30% stock market drop, according to BCA Research.
The Great Recession of 2008-2009 left its scars unhealed, and the Covid-19 economic downturn dealt the US one more blow. Concerns regarding the instability of the financial markets are now resurfacing. BCA Research, a Canadian investment research organisation, predicts volatility in the US stock market going forward.
According to Fox Business, in a note to clients last week, BCA Research chief global strategist Peter Berezin warned that, contrary to popular belief, the economy will fall into a recession either this year or in early 2025. Should that happen, the S&P 500 could tumble to 3,750, which marks a 30% drop from current levels.
Berezin's prediction hinges on the belief that the labour market will slow notably in the coming months, which will weigh heavily on consumer spending, a major driver of economic growth. The relationship between inflation and unemployment is measured by something called the "Phillips curve."