On Fox’s “Mornings with Maria,” Piper Sandler’s Chief Global Economist Nancy Lazar warned that the world is in the early stages of a “very significant” and “synchronized” recession.
However, she said the threat is outside of the U.S. and is being led by the Eurozone given what’s been going on with oil prices and global interest rates.
Bank analysts believe the Fed will have to raise interest rates much higher than analysts currently expect to successfully stamp down on inflation.
They said, “We will get a major recession, but our strongly held view is that the sooner and the more aggressively the Fed acts, the less longer-term damage to the economy there will be.”
Our nation’s economy shrank for the first time since the pandemic recession struck two years ago.
New data indicates that in Q1, GDP was down 1.4% on an annualized basis.
Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, told Fox, “Today’s shock drop in GDP is a wake-up call that the economy isn’t as strong as we all thought. It’s possible that GDP gets revised higher next month, as this is just the first release and there will be two revisions, but it is a warning sign.”
And yet, despite the shrinkage, economists do foresee a return to growth for the rest of 2022 based on the strength of the job market and consumer spending.
While economic recovery is ongoing, investors are still looking for save haven investments.
Many analysts agree that gold is still the real hedge against inflation, not cryptocurrencies.
In a report earlier this month, Ipek Ozkardeskaya, an analyst with Swissquote, said, “It is now clear that Bitcoin trades parallel to the risk assets, rather than [as] a safe haven. Bitcoin is still not the digital gold, it’s more of a crypto-proxy for Nasdaq, apparently.”
Louise Street, a Senior Markets Analyst with the World Gold Council, added, “Stagflation risks are rising and geopolitical tensions show few signs of a quick resolution. Gold is historically one of the strongest performers in a stagflationary environment, in which equities suffer and commodities often retreat.”
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