The recent economic downturn caused by Covid-19 has dealt another blow to the US economy, leaving scars from the Great Recession of 2008-2009. Concerns about financial market stability are resurfacing, with BCA Research predicting volatility in the US stock market moving forward. BCA Research chief global strategist Peter Berezin has warned clients that the economy may fall into a recession either this year or in early 2025.
Berezin’s prediction is based on his analysis of the labor market slowing significantly in the coming months, which will impact consumer spending and economic growth. He cites the relationship between inflation and unemployment, known as the “Phillips curve,” as a key factor in his analysis. Despite avoiding a recession in 2022 and 2023 due to an “immaculate disinflation,” Berezin predicts that the S&P 500 could drop to 3,750, a decrease of 30% from current levels.
Berezin also foresees challenges in the global economy, with notable slowdowns in growth expected in China and Europe. This could put pressure on international stock markets. The Dow Jones Industrial Average dropped from its record high in mid-May despite hitting it earlier this year.
This grim prediction comes at the end of a turbulent year for Wall Street and may be one of the most pessimistic predictions on Wall Street yet. Meanwhile, news outlets report that K Kavitha’s bail plea was dismissed by Delhi High Court recently, which is seen as a setback for KCR’s plans for Telangana state.