Title: RBC Global Asset Management Predicts 70% Probability of Recession in 2024
Subtitle: Firm Outlines Six Reasons for Their Forecast; Expects Mild Economic Downturn
Canadian investment management firm, RBC Global Asset Management, has assigned a 70% probability of a recession occurring in 2024. The firm has shared six reasons to support their recession prediction, pointing to various economic indicators and warning signals.
Despite the Federal Reserve’s interest-rate hiking cycle, which has yet to cause a downturn, RBC believes there are signs of weakness in economic and business data that suggest a potential economic slowdown ahead. According to the firm’s recession scorecard, several warning signals, such as inverted yield curves and tightened financial conditions, have caught their attention.
RBC’s business-cycle model also indicates that the economy is vulnerable to a downturn. They believe that the economy is currently operating beyond a sustainable level, which may necessitate a period of sub-par activity to rebalance itself. Moreover, central banks worldwide are focused on cooling inflation, which could result in a period of economic weakness.
While RBC expects the upcoming recession to be relatively mild and short-lived compared to historical patterns, it acknowledges that it will still cause pain for businesses, households, and financial markets. However, the firm adds that it anticipates fewer job losses during this recessional period than what has typically been observed in the past.
This recession prediction by RBC Global Asset Management sheds light on the potential challenges that lie ahead for the global economy. As businesses and households brace themselves for a period of economic weakness, the hope remains that the impact will be manageable and short-lived. The firm’s insights and warning signals are essential for investors and individuals alike to make informed decisions during these uncertain times.
As always, RBC Global Asset Management stresses the importance of staying focused and prepared, regardless of the economic outlook. Monitoring economic indicators and seeking professional advice can help individuals and businesses navigate the potential ramifications of a recession.
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