After a recent report from the Federal Reserve showed that the U.S. economy is heading toward a recession, the CEO of Morgan Stanley has weighed in with his own predictions. He says that the markets are currently on an “excessively high” level due to expectations of aggressive central bank action. However, he believes that the risk of a severe contraction is remote. According to his forecast, the US economy will experience a contraction of around 50% in 2022.
This latest forecast is a significant one. While the company still sees a 50% chance of an early recession, its CEO is more focused on the possibility of other non-financial threats. That includes the threat of cyberattacks. While that might be scary, it’s better than no recession at all. And the CEO is right about the economy’s overall health.
The current financial environment is causing many investors to be wary of the approaching recession. The aggressive monetary policy of the US Federal Reserve is a large contributor to the current sell-off in the markets. However, despite these risks, Gorman said that the economic fundamentals are far better than what is reflected in the markets. In June, JPMorgan Chase CEO Jamie Dimon warned of an upcoming economic “hurricane.” On Friday, Wells Fargo CEO Charlie Scharf warned that the U.S. was heading for a recession in the near future.
According to a survey by Morgan Stanley, 75% of consumers plan to cut back on dining out and takeout within the next six months. Meanwhile, 60% of consumers plan to decrease grocery spending. Despite the warnings, consumer spending should be relatively resilient, if the Fed is able to bring down inflation levels. However, the road ahead will be bumpy for many consumers.
The company is headquartered in Australia, Switzerland, and the United Kingdom. It is regulated by the Swiss Financial Market Supervisory Authority. Morgan Stanley Private Wealth Management Ltd is licensed by the Financial Conduct Authority. Morgan Stanley Wealth Management is a global investment firm. Its subsidiaries operate in many countries. Please read the fine print before investing in any of its products or services. There are many risks to investing in these securities, but there are a few things you can do to protect your investments and avoid losing money.