World-renowned investment manager predicts US recession as Federal Reserve delays rate cuts
US economy losing its exceptionalism
Leading financial analysts from ING foresee a series of rate cuts by the Federal Reserve in an effort to combat an impending US recession. They predict a 50bp rate cut on 18 September, followed by additional cuts in November and December, ultimately bringing the policy rate down to 3.50% by next summer. This anticipated monetary policy shift is expected to have a bearish effect on the USD, with the upcoming November US elections serving as a critical factor.
Short-term market projections suggest a period of stability for equity markets and volatility, allowing for a potential rise in EUR/USD above 1.10 as it aligns with interest rate differentials. Overall, a gradual decline in the USD is anticipated as part of a strategic adjustment.
While the eurozone economy faces challenges, there is a notable shift towards convergence with the US. The era of ‘US exceptionalism’ appears to be coming to an end, signaling a new phase in global economic dynamics.