Strategist Expects US Recession by Year-End, Fed Tightening to Drag Down Economy
Investment bank MPS Capital Services has warned that the U.S. economy will be in a recession by year-end. The firm’s strategist predicts that the Federal Reserve will raise interest rates by an additional 25 basis points, warning that the central bank’s monetary tightening “will drag down on the economy.” Strategist’s Recession and Rate Hike Predictions
Luca Mannucci, head of Market Strategy at MPS Capital Services, has warned that the U.S. will be dragged into a recession by year-end and the U.S. dollar will plunge as much as 5% against other currencies in the second half of this year, Bloomberg reported Thursday.
MPS Capital Services is an Italian corporate and investment bank, part of the banking group that includes Banca Monte dei Paschi di Siena SpA. The strategist was quoted as saying: We expect the recession in the U.S. by year-end … The tightening of the monetary policy will drag down on the economy.
Mannucci predicts that the Federal Reserve will raise interest rates by an additional 25 basis points, while the European Central Bank (ECB) is expected to increase rates by at least two quarter-points.
He expects the U.S. dollar to depreciate by about 3% against the euro in the coming months due to the Federal Reserve’s interest rate hikes, the news outlet conveyed, noting that the Bloomberg Dollar Spot Index has already dropped 1.6% this year, and it has fallen approximately 10% from September’s record high.
The MPS strategist further warned that the failure of several regional U.S. banks, along with the issues faced by Credit Suisse, could result in tighter credit conditions and hurt the economy.
Many people have predicted a recession in the U.S. The president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, says the current banking crisis has pushed the U.S. economy closer to a recession. Economist David Rosenberg has warned of a “crash landing” and an impending recession for the U.S. economy. Gold bug Peter Schiff cautioned that the U.S. will face a financial crisis and a “much more severe recession” than the Fed recognizes. Meanwhile, billionaire “bond king” Jeffrey Gundlach foresees “painful outcomes” in the next recession. Tags in this story fed inflation, fed recession, Fed tightening, Federal Reserve rate hikes, Federal Reserve tightening, interest rate hikes, MPS, MPS Capital Services, MPS Fed rate hikes, MPS recession, MPS strategist, US Inflation, us recession
What do you think about the predictions by the MPS strategist? Let us know in the comments section below. Kevin Helms
A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Economist Harry Dent Expects Biggest Crash in Our Lifetime to Hit Between Now and Mid-June ECONOMICS | 7 hours ago JPMorgan CEO Jamie Dimon Says Banking Crisis Not Over — Warns of "Repercussions for Years to Come" ECONOMICS | 9 hours ago
Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleCommittee Advises SEC to ‘Aggressively Assert Authority’ Over Crypto — Says Virtually All Crypto Tokens Are Securities Next articleTemDAO World Heritage Project Helps the Cultural Sector through Democracy-Fueled Donations Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItDraft Law Regulating Aspects of Crypto Taxation Submitted to Russian Parliament
A bill updating Russia’s tax law to incorporate provisions pertaining to cryptocurrencies has been filed with the State Duma, the lower house of parliament. The legislation is tailored to regulate the taxation of sales and profits in the country’s market ... read more.Bill ‘On Digital Currency’ Caps Crypto Investments for Russians, Opens Door for Payments UAE Airliner Emirates to Launch NFTs and Experiences in the Metaverse Privacy-Centric Monero Plans for July Hard Fork, Plans Include Ring Signature, Bulletproof Upgrade Terra"s Algorithmic Dollar-Pegged Crypto UST Is Now the Third-Largest Stablecoin