The US is headed for a more severe recession than the Fed’s “mild” expectation— and stocks won’t be bailed out when this happens, according to Macquarie’s top economist. “Over the past 10 years the playbook has been ‘buy the dip, and the Fed will always come riding to the rescue if it sees any economic weakness’,” says Macquarie’s David Doyle. “I’m not so sure that that will be the playbook for the next six to 12 months.” As recession fears intensify, a new study shows that Americans’ confidence in a comfortable retirement has dipped the most since the 2008 financial crisis. 40% of workers and 58% of retirees report declining retirement account balances over the past 12 months, and more consumers than ever have turned to buy now, pay later (BNPL) options. Historically, BNPL has been used for items such as clothing and furniture, but it is now being increasingly used for everyday necessities. “It does worry me when people are financing things like groceries and gas in this manner,” says analyst Ted Rossman.
Markets Insider/George Glover
The US will suffer a recession – and don’t expect the Fed to rescue stocks when that happens, top Macquarie economist says
The US is headed for an even worse recession than the Federal Reserve is expecting – but the central bank still won’t bail out stocks when that happens, according to Macquarie’s top economist.
David Doyle, the Australian financial services group’s head of North America economics, said in a recent interview that inflation is too high for investors to be able to rely on the prospect a “Fed put”, which refers to when policymakers ease monetary policy to support the economy and markets.
“Over the past 10 years the playbook has been ‘buy the dip, and the Fed will always come riding to the rescue if it sees any economic weakness’,” he told Insider. “I’m not so sure that that will be the playbook for the next six to 12 months.”
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Barron’s/Elizabeth O’Brien
Retiree Confidence Posts Steepest Decline Since 2008
Americans’ confidence in a comfortable retirement has dipped the most since the 2008-09 financial crisis, a new study shows.
Sixty-four percent of workers feel at least somewhat confident of living a comfortable retirement, down from 73% in 2022, according to the long-running Retirement Confidence Survey from the Employee Benefit Research Institute and Greenwald Research, released Thursday. It was the steepest year-over-year decline since 2007-2008 and the lowest overall sentiment number since 2018. Among workers who expressed a lack of confidence, 29% cited inflation as the reason, while 40% cited having little to no savings.
While the rate of price increases has slowed, essentials from food to rent still cost more than they did last year. In March, prices on an index of all items tracked by the Bureau of Labor Statistics rose 5% from the same time last year. Gas prices are down over that time period, but food prices are up 8.5% and shelter is up 8.2%.
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Fox Business/Agustin Hays
Americans using buy now, pay later to afford groceries, other necessities
As inflation continues to squeeze Americans, some are turning to buy now, pay later (BNPL) options to scrape by.
A new LendingTree survey shows about 46% of consumers used BNPL this year. That’s up from 43% a year ago and 31% in 2021.
While many consumer goods retailers, both online and brick and mortar, are providing these services to generate revenue, it’s a “bad outcome” for consumers’ balance sheet, O’Leary Ventures Chairman Kevin O’Leary warned.
You can read the full article, here.
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