'Proper' Recession Downturn Looms and Will Trigger Steep Fed Rate Cuts
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Economist Frances Donald warns that a 'proper' economic downturn is looming in the US, which could trigger steep rate cuts as soon as this year. With a slowdown in the US labor market, two negative quarters of growth could hit at the end of the year, prompting the central bank to ease quickly and beyond market expectations. Donald believes that the downturn will require a proper easing cycle and not just insurance cuts. Futures markets are already pricing in two 25-basis point cuts closer to the end of this year. The weakening labor market, including household and temporary employment stats, consistent job loss data, dropping quit rates, and a pullback in small business hiring, supports the recessionary outlook. The Fed's inability to cut rates sooner adds risk in the near term.

#UsEconomy #Recession #FederalReserve #InterestRates

https://www.businessinsider.com/recession-downturn-outlook-us-economy-fed-pivot-interest-rate-cuts-2024-5