Macquarie Economist Predicts Severe US Recession and Unlikely Fed Intervention

Macquarie’s Chief Economist, David Doyle, has recently warned that the United States is headed towards a much more severe economic downturn than originally predicted. Doyle predicts that the US will experience a recession in 2020 or 2021, which will be deeper and more prolonged than the 2008 financial crisis. Doyle also suggests that the Federal Reserve is unlikely to intervene in the stock market during this recession, stating that the Fed does not have the necessary tools to prevent a market crash.

The US Economy Is Headed Toward a More Severe Downturn than Predicted

Doyle’s predictions are based on several factors, including the ongoing trade war with China, the possibility of a no-deal Brexit, and the slowdown in global growth. He also cites the fact that the US has been in an economic expansion for over a decade, and that a recession is overdue. Additionally, Doyle warns that the US consumer, who has been the main driver of economic growth, may not be as resilient as previously thought.

Fed Unlikely to Bail Out Stocks During Upcoming Recession, Says Macquarie’s David Doyle

Doyle suggests that the Fed is unlikely to bail out the stock market during a recession due to the weak inflation environment. The Fed has traditionally used a strategy known as the “Fed Put,” which involves cutting interest rates to boost the stock market during a downturn. However, Doyle argues that the Fed’s ability to implement this strategy is limited due to the lack of inflationary pressures.

Despite recent market rallies, Doyle warns that the US economy is headed towards a recession. He advises investors to be cautious and prepare for a downturn. Doyle suggests that investors should consider diversifying their portfolios, adding defensive stocks, and reducing exposure to cyclical sectors. Overall, Doyle’s predictions paint a bleak picture of the US economy, and investors should take note of his warnings.