Renowned economist Gary Shilling, who is well-known for his precise forecasts, has expressed new worries about the possibility of an impending recession in the US. Known for predicting the American real estate industry’s 2008 collapse, Shilling expressed his concerns on The Julia La Roche Show, suggesting that the Federal Reserve may decide to decrease interest rates in order to combat inflation in the next year.
His most recent caution focuses on the recent boom in commercial real estate, which Shilling believes might implode and cause a significant recession. The consequences, he said, may cause the stock market to plummet by a whopping thirty percent.
According to Shilling, stocks might fall between 30% and 40% from their high. This would mean that the US S&P 500 index could fall below 2,900 points, levels not seen since the COVID-19 epidemic.
Shilling notes that there isn’t a recession in the US right now, but there is a chance one might strike without obvious warning signs. Shilling’s admonishing remarks are consistent with worries on the resiliency of the US economy based on an analysis of important indicators linked to economic downturns.
Shilling’s forecasts are significant because of how the US economy affects the whole world. For example, the US recession of 2008 had a significant impact on international stock markets, particularly those in nations like India.
Shilling, who founded his economic consulting and financial advising business in 1978, observes that during recessions, corporate earnings often fall sharply, which frequently causes a matching dip in stock prices.
Shilling has taken bets against equities via exchange-traded funds and commodities by shorting copper, although he is now invested in Treasury bonds and the US currency. Amidst economic uncertainty, the financial markets prepare for possible changes as investors consider Shilling’s cautions.