Founder and Executive Chairman of Evercore Roger Altman supposes that the US is headed for an even more serious recession than Federal Reserve Chair Jerome Powell has projected.
The market veteran thinks that the Federal Reserve underestimates the magnitude of the upcoming recession. The inverted yield curve of the US Treasury and the current condition of the small business are alarming signs of a coming recession. Judging by these signs, the country will face a moderately strong recession by the end of 2023.
The Treasury yield curve is a notoriously reliable indicator of a coming recession when inverted, Business Insider wrote. Not so long ago, the indicator manifested its steepest inversion in the last 40 years. As a result, the yield of the 2-year Treasury surpassed the 10-year yield by 1 percentage point. According to Roger Altman, the inverted yield curve has preceded previous recessions by about 18 months.
The US authorities have not declared a recession yet, ignoring the unfavorable situation. Earlier, Jerome Powell pinpointed that “a recession wasn't the most likely probability for the US economy.” However, analysts see some indicators spelling trouble for the economy. Thus, Evercore's trucking index dipped below 48 points, which is a threshold that separates a downturn from a normal condition.
"To me, the likelihood is a moderate recession. You can look at the yield curve. You can look at … the small business confidence index. You can look at so many data points which are pointing downward," Altman concluded.
