Moody’s Analytics’ chief economist Mark Zandi has warned of an impending recession and urged the Federal Reserve to cut interest rates.
What Happened: In a tweet on Saturday, Zandi expressed concern over the slowing economy.
He noted that the real GDP is projected to grow by only 1.5% in the first half of this year, a significant drop from the 2.5% growth seen last year.
Despite the low unemployment rate of 4%, Zandi pointed out that it is on the rise. He warned that this increase “is nearing a threshold” that suggests a recession is imminent.
Steven Blitz, an economist at GlobalData TS Lombard, stated last week that there is a 60% probability that Fed Chairman Jerome Powell will catch markets off guard with a rate cut next month.
Although markets consider it unlikely, the Federal Reserve might lower interest rates for the first time in July as signs of an impending recession emerge.
Blitz argued that a July rate reduction would be a preemptive move to stave off a potential recession, given recent economic data showing signs of weakness.
“The recent run of broad data suggest that if June payrolls look more like April than May, and June data generally follow suit, the FOMC will let the doves fly in their July communication,” Blitz told Business Insider.
Why It Matters: Zandi’s warning comes at a time when the economy is showing signs of slowing down. His call for the Federal Reserve to cut interest rates suggests that he believes this could be a potential solution to prevent the looming recession.
As a respected economist, Zandi’s views hold significant weight in financial circles. His warning could potentially influence the Federal Reserve’s decision on interest rates in the coming months.
Now Read: Economist React To May Retail Sales Data: ‘Consumer Spending Is Cooling In A Fairly Orderly Fashion’
This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Photo: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
