A survey was carried out in July by Bankrate.com that polled 2,800 Americans. The study concluded that 40% of those who were polled say they feel the next recession has already begun or will begin within the next 12 months.
There have been several signs over the course of the last few months that are predicting the next great recession, similar to what we experienced in 2008. Some of those signs include the Federal Reserve cutting interest rates. The Fed cut interest rates last week and some are predicting they will be cut again as early as next month. The last cut took place shortly before the last recession in 2007.
The next sign of a looming recession is the intensifying trade war between the US and China. President Trump announced last week an additional 10% tariff on $300 Billion dollars in Chinese imports. China retaliated by suspending agricultural purchases from the US.
Treasury Yield Curve
The Dow plunged 760 points on August 5th marking the worst day in 2019. Investors are running to the safety net of treasury bills, gold, and cryptocurrency. When investors run toward treasury bonds, the yield curve flips. The treasury yield curve has consistently flipped before the last seven recessions. The last time the US bond yield curve inverted was in March of 2019 and it inverted again on August 5th, 2019.
Morgan Stanley’s chief economist, Chetan Ahya, predicts the next great recession will hit within the next nine months.
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