BlackRock, Morgan Stanley and others warned about the threat of a recession.
Peter Zelei Images/Getty Images
Experts including Jeffrey Gundlach, David Rosenberg, and Jeremy Siegel have sounded the alarm on an oncoming economic slump.
The banking turmoil has further undermined economic confidence and added to the pessimistic outlook.
Here are some of the most recent recession warnings from high-profile investors, analysts and other experts.
The brief bout of economic optimism that marked the start of this year, sparked by some surprisingly strong data, has long worn off and the recent banking turmoil has undermined the confidence of investors and businesses.
A raft of big Wall Street names and other experts are now issuing fresh warnings of an impending recession that could cripple corporate earnings and send stocks tumbling. Jeffrey Gundlach, David Rosenberg, Morgan Stanley’s Mike Wilson and Wharton professor Jeremy Siegel are among those who have sounded the alarm on an oncoming economic downturn.
To be sure, there are still optimists left on Wall Street – short-seller Jim Chanos has suggested that carefree partying and gambling in Las Vegas could be a signal that an economic slump isn’t coming anytime soon.
Yet, the latest economic commentary from top voices is sounding a distinct note of caution about increased economic risks. Below is a selection of the most recent recession warnings from high-profile investors, analysts and other experts.
Jeffrey Gundlach, DoubleLine CEO
“The economic headwinds are building, we’ve been talking about this for a while, and I think the recession is here in a few months,” the veteran investor told CNBC on Monday.
Mike Wilson, Morgan Stanley’s chief US equity strategist
“Markets go through these periods I call a rolling bear market [or] rolling recession,” Wilson told Bloomberg TV on Monday. He noted this week that the stock market is facing the highest risk of downside in the past year.
David Rosenberg, Rosenberg Research president
“No recession? Well, there sure is one in corporate profits, with today’s revised Q4 GDP report showing that pre-tax earnings collapsed at an -18% annual rate for the second straight quarter and contracting on a YoY basis for the first time since 2020 Q2,” the veteran economist tweeted Thursday.
BlackRock, world’s largest asset manager
“Central banks confront the growth-inflation trade-off, with the Federal Reserve seeing recession but no rate cuts. We agree,” Wei Li, global chief investment strategist at BlackRock, wrote in a report published this week.
“We don’t see rate cuts this year – that’s the old playbook when central banks would rush to rescue the economy as recession hit. Now they’re causing the recession to fight sticky inflation – and that makes rate cuts unlikely, in our view,” she said.
Jeremy Siegel, Wharton professor
“The risk of recession has increased clearly,” the author of “Stocks for the Long Run,” warned in his weekly commentary for WisdomTree, published Monday.
“The economic data last week was mixed: initial jobless claims came out on the strong side, below 200,000, but we got a very weak durable goods report,” he added.
Robert Shiller, Yale economist
“We have smart people on the Fed and the Treasury Secretary I admire, Janet Yellen,” the Yale economist said Monday. “They may have to accept something of a recession.”
Nicholas Colas, DataTrek co-founder
“The default scenario baked into asset prices is based on the Fed pivoting – quickly – to lowering policy rates. That can only mean a recession is close at hand, one that would reduce inflation and be steep/deep enough to force the Fed to act,” said DataTrek’s co-founder.