The United States economy is heading towards a “proper downturn,” according to Frances Donald, the chief economist at investment management firm Manulife Investment Management. Donald recently warned that the US economy may be in for a rough patch in the near future, citing a variety of factors that could contribute to a slowdown.
One of the primary concerns for Donald is the ongoing trade war between the US and China. The two countries have been engaged in a tit-for-tat series of tariffs and trade restrictions, leading to uncertainty and volatility in global markets. The trade war has already taken a toll on businesses and consumers, and could continue to drag down economic growth in the US.
In addition to the trade war, Donald pointed to other factors that could contribute to a downturn in the US economy. These include slowing global growth, rising interest rates, and mounting debt levels. As a result, she believes that the US is at risk of experiencing a more significant slowdown in the near future.
Despite these concerns, Donald noted that the US economy is still relatively strong compared to other major economies around the world. Unemployment is at historic lows, and consumer spending remains robust. However, she warned that these positive indicators could be overshadowed by the negative impacts of the trade war and other factors.
In light of these challenges, Donald stressed the importance of policymakers taking action to mitigate the risks facing the US economy. This could include measures to reduce trade tensions, stimulate economic growth, and address mounting debt levels. By acting proactively, she believes that the US could potentially avoid a more severe downturn in the coming months.
Overall, Frances Donald’s warning that the US economy is heading for a “proper downturn” serves as a reminder of the fragile state of the global economy. As policymakers and investors navigate these uncertain times, it will be critical to monitor developments closely and plan accordingly to minimize the impact of any potential economic slowdown.
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Yet the SP500 continues to march higher over time. So easy.
Google this: "Interest Payments by US Households" hit IMAGE to see a shocking chart: Non-Mortgage interest (auto and CC's) is hyperbolic, and equals mortgage for first time in history.
The Feds are trying squeeze the money we borrowed back into the system due to the pandemic. The higher the interest rates, or pause on rate cuts, will slow economic growth. That is what is at play here.