Abby Joseph Cohen, former Goldman Sachs chief U.S. strategist, joins ‘Squawk Box’ to discuss where investors currently are, how Joseph Cohen would forecast the next year, and much more. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
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BREAKING: Recession News
LEARN MORE ABOUT: Bank Failures
REVEALED: Best Investment During Inflation
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Recession Probability Been Rising in Recent Months, Says Abby Joseph Cohen
As the global economy continues to grapple with the ongoing COVID-19 pandemic and its subsequent fallout, concerns about a potential recession have become more pronounced. Abby Joseph Cohen, a widely respected economist and senior investment strategist at Goldman Sachs, recently came forward to highlight a worrisome trend – the probability of a recession is rising.
Cohen, known for her accurate predictions and insightful analysis, cites various factors contributing to the increased chance of an economic downturn. She notes that employment figures, consumer spending, and business investment have all taken a significant hit due to the pandemic-induced lockdowns and subsequent restrictions. With many businesses struggling to survive and millions losing their jobs, it’s no surprise that the economy is feeling the strain.
One crucial aspect, according to Cohen, is the lack of significant fiscal policy support. While governments worldwide have implemented various stimulus measures, including direct cash transfers and loans for businesses, the sheer scale of the crisis means that these actions might not be enough to prevent a recession. Cohen emphasizes the need for comprehensive government intervention and further fiscal stimulus to mitigate the damage caused by the pandemic.
Furthermore, Cohen highlights the ongoing uncertainty and potential long-term effects of the pandemic. The inability to contain the virus, sporadic spikes in cases, and a slow vaccine rollout have all contributed to waning consumer confidence and decreased economic activity. These factors create a vicious cycle, with lower consumer spending leading to reduced business revenue and subsequently forcing companies to cut costs through layoffs and reduced investments.
While governments and central banks have stepped in to mitigate the impact with historically low interest rates and quantitative easing measures, Cohen warns that these measures cannot be relied upon indefinitely. The possibility of inflation and ballooning debt burdens loom large and may further hinder economic recovery in the long run.
The impact of the pandemic has not been uniform across sectors either. Cohen notes that certain industries, such as travel, hospitality, and entertainment, have been hit hardest and will likely take longer to recover fully. These sectors often employ low-wage workers, making it even more challenging for individuals and families to cope with the economic aftermath.
In conclusion, Abby Joseph Cohen’s concerns about the rising probability of a recession reflect the complex challenges faced by global economies in the wake of the COVID-19 pandemic. With no immediate end in sight, governments and policymakers must implement robust, comprehensive measures to support businesses, protect jobs, and boost consumer spending. Failure to do so could result in long-term damage to the global economy and exacerbate already-existing inequalities.
Funny how record corporate profits and CEO pay just happened at the same time as high inflation. It's disgusting what the corporate and Wall Street world has done to America.
Well, I'll go ahead and quantify my reasoning for a recession because I do think its quantifiable to an extent. Credit Card debt has hit 1 trillion for the first time ever and shows no signs of stopping. Student loan repayments are continuing after this month which saps 17.3 billion dollars monthly from already struggling consumers' pockets to spend. Essentially everyone has been upbeat about economic prospects going through this period of rate hikes due to data like GDP growth and unemployment being strong and resilient through it all, but the truth is that consumer spending is only staying strong because people are spending like crazy through credit cards racking up loads of debt which is unsustainable. These interest rates are going to continue to eat people alive financially. Eventually the house of cards will come falling down and the REAL recession that everyone has been anticipating will hit. Furthermore the yield curve has inverted to the deepest point since the early 1980s last year and the 2/10 year treasury yield inversion has accurately forecasted a recession every single time since 1970 that it is almost prophetic at this point. Also every single rate cycle increase where the Federal Reserve has boosted interest rates above 5% has also been followed by a recession. I moved all my money to long term treasuries anticipating a downturn and the fed having their hand forced to tank interest rates as a result.
Let's go BRANDON….let's go BRANDON…let's go BRANDON
Welcome to BIDENFLATION
TRUMP 2024
Don't barf in your mouth.
Rather than attempting to predict future recessions and risking financial losses, a more effective strategy is to build a well-diversified portfolio that can withstand various market conditions. This approach has allowed some individuals to consistently generate substantial returns, averaging around 150K every quarter as reported by Bloomberg.
History tells us
the federal reserve has created nearly all recessions **
This one as well.
Why?
Because that is thier plan.
If you think otherwise you would be dipping into americas endless vat of ignorance.
**
Nine times since 1961, the federal reserve has embarked on a series of interest rate increases to rein in inflation. Eight times a recession followed.Mar 29, 2022
I’m favoured! Despite the ups and downs in the economy, I'm so happy withdrawing $32K weekly profit out of my investment I just cleared my mortgage 7 months ago and I give back 20% of my weekly interest back to Charity. People should learn to invest more and spend wisely
So, basically, she is in the no landing, high inflation, and the Fed does nothing by feed the inflation fire camp. Ok, got it.
So Abby Joseph Cohen is suggesting that a recession will be declared by the NBER months, weeks, and days before the 2024 Presidential Elections which will hand the White House to the Orange man who has committed to cleaning out the swamp and old establishment.
I expect a rally ahead of the 2024 elections.
This is no longer a recession. Not even a depression. Its Much worse, this is A CURRENCY COLLAPSE! And the world's slow response to America losing its status as the reserve currency is the only surprise. Note that a weak dollar can signal an economic downturn, making me to ponder on what the best possible ways to hedge against inflation, and I've overheard people say inflation is a money-eater. This is making me worry about my my entire savings!!! Can anyone relate?
Student loans coming back is about to do a lot more damage than people realize.
Abby is a national treasure! I remember her from the late 80s at GS. We need more folks like her giving straight talk. High interest rates have an impact. The union strikes and political games can derail a modest growth rate.
Bull market is here, have been doing amazing
Goldman Sachs just decreased it to 15% chance of a recession. I believe what I see which is a slowing economy. Might just be a mild recession
JP Morgan decreased recession odds to 15% this one says its increasing. So many mixed messages from these economists and experts that are supposed to know where we are going. Everyone is wrong therefore my model is likely correct. Zzzzzz
Voice of wisdom
She's smoking hot! <3