Recession probability is 'quite high,' economist says

Listen to this article

All eyes are on Federal Reserve Chair Jerome Powell ahead of his upcoming speech at the Jackson Hole Economic Symposium, with markets (^DJI, ^IXIC, ^GSPC) seeking any insights into the Fed’s potential monetary policy outlook. However, despite an expected interest rate cut in September, recession fears are growing among investors.
ROTH Capital Partners chief economist and macro strategist Michael Darda joins Morning Brief to discuss these economic concerns and rate cut expectations.
Darda points out that the unemployment rate has been trending higher “in a persistent fashion,” historically a recession indicator. “Any way you slice it, it means the economy at a minimum is growing below the growth rate potential, if it’s growing at all,” Darda notes.
Darda highlights a significant challenge for the Fed: if the economy is entering a recession, initial data might not reflect this reality. He warns that the Fed’s “totality of the data approach can get the Fed into trouble.”
Given these dynamics, Darda says the probability of a recession is “quite high” and suggests the Fed should consider a more aggressive 50-basis-point cut in September.
“I would put this question to Fed Chair Powell if we spoke today: Does the committee want the real policy rate moving up on net at a time when the labor market is losing steam and consumers are under pressure?” he tells Yahoo Finance.
#youtube #news #stockmarket
About Yahoo Finance:

Yahoo Finance provides free stock ticker data, up-to-date news, portfolio management resources, comprehensive market data, advanced tools, and more information to help you manage your financial life.

– Get the latest news and data at finance.yahoo.com

– Download the Yahoo Finance app on Apple (https://apple.co/3Rten0R) or Android (https://bit.ly/3t8UnXO)

– Follow Yahoo Finance on social:

X: http://twitter.com/YahooFinance
Instagram: https://www.instagram.com/yahoofinance/?hl=en
TikTok: https://www.tiktok.com/@yahoofinance?lang=en
Facebook: https://www.facebook.com/yahoofinance/
LinkedIn: https://www.linkedin.com/company/yahoo-finance

source