Pgiam/iStock via Getty Images
Invesco argued Friday that a mild recession is still on the horizon, citing the likelihood that the Federal Reserve’s recent interest rate adjustment will likely take 12 to 18 months to work its way through the economy.
“Based on the delayed effects of adjustment… we believe the United States may experience a mild recession in early 2024”, Invesco fixed.
Additionally, Invesco noted that recessions typically develop over a four-stage period and we are currently in stage three. See the four steps Invesco outlined:
1. The Federal Reserve begins a tightening cycle.
2. The spread between the 10-year US Treasury rate and the 2-year US Treasury rate is inverted.
3. The spread between the 10-year US Treasury rate and the 3-month US Treasury rate is inverted.
4. Recession begins within 1 to 2 years.
Regarding Friday’s operations, the reference averages (dji), (SP500) and (IND COMP.) along with its mirror ETFs (DIA), (SPY), (VOO), (IVV), and (QQQ) are noticeably lower.
