Don’t rule out a U.S. downturn

U.S. consumer confidence is high, unemployment is well below historical averages, while supply constraints mean that plenty of jobs are now within reach for many Americans. However, some forward indicators are showing signs of risks brewing on the horizon.

Vihari Ross, Head of Research at Magellan Financial Group, doesn’t rule out the possibility of a downturn in the U.S., especially given the precarious position in which the Fed finds itself as it stares down the possibility of a deteriorating economy offsetting its quantitative tightening agenda.

“The risk is that you could end up in a situation where they (the Fed) actually can’t take rates up any more because the economy starts to deteriorate.”

Watch the short video below to see why there are two potential ways in which we could end up with a lower rather than higher Fed funds rate.

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