The chief global market strategist at Invesco, a global investment firm with $1.3 trillion under management, has warned that the Federal Reserve is playing “a dangerous game” with its 75-basis-point rate hikes. She noted that the Fed’s action could lead to “a significant recession.”
Invesco’s Chief Strategist on Recession and the Fed’s Efforts to Fight Inflation
Invesco’s chief global market strategist, Kristina Hooper, shared her thoughts about the U.S. economy on Bloomberg’s What Goes Up podcast last week. Invesco, a global independent investment firm managing over $1.3 trillion of assets (AUM), as of September 30. Invesco employs over 8,400 employees in more than 26 countries.
Hooper is an investment professional with 21 years’ experience. Hooper explained that the stock markets have been volatile as the Federal Reserve fights inflation. Hooper noted that even though inflation may be a problem for the economy, the central bank had already indicated it would not stop until it has it under control. The Fed could raise interest rates another 75 basis points in the November Federal Open Market Committee meeting (FOMC), and again in December.
The Invesco chief global market strategist cautioned: “75 is the new 25 … When you are raising rates in 75-basis-point increments and you’re not giving any time for it to process through and make its way through into the data, you’re playing a dangerous game.” She concluded:
The more you’re doing it, the more likelihood you create of having a recession — and a significant recession.
Numerous people warned of a possible recession. Recent surveys show that 98% are planning for an American recession, while the other 99% plan for a European recession.
Elon Musk, CEO of Tesla, said that the recession may last through the spring 2024. David Solomon, Goldman CEO, sees good chances of a recession. He advises investors not to panic. Jamie Dimon from JPMorgan Chase stated that the U.S. could be in recession within six months.
Jim Rogers is a legendary investor who has said that the next recession could be worse than any he’s ever experienced. Gold bug and economist Peter Schiff also believes that the Federal Reserve’s action could lead to a severe recession in addition to market crashes and a massive financial crisis.
What do you think about the comments by the Invesco strategist about the recession and the Federal Reserve’s action? Comment below.
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