Japanese stocks suffered their biggest ever daily loss Monday as fears about a US economic slowdown sent shock waves through global markets. (Issei Kato/Reuters via CNN Newsource
But Goldman’s recession chances are still 10 percentage points higher than they were before Friday’s jobs report, which it called “more concerning now.”The stock market had hit record after record this year, buoyed by falling inflation and the growing sense that the Fed would shift from its series of aggressive rate hikes and start to rate cuts, which can boost corporate profits.The Fed is notoriously horrible at timing its rate cuts and hikes.
The Fed’s next meetings are scheduled for September, November and December, Analysts at Citigroup and JPMorgan predict the Fed will slash rates by half a point at its next two meetings. But that may be too late. It may be forced to make an emergency rate cut before then — an extraordinary intervention the market increasingly views as likely, according to
“It’s so far behind the curve right now. I mean the Fed is up in the bleachers,” said Siegel. “You take a look at the data; it’s not at all comforting.”Stocks had also been flying high over the past two years because of big bets on tech companies involved in artificial intelligence: Many hoped that AI would create another global industrial revolution., and the unproven technology isn’t yet ready for prime time. Some fear it’ll never get there.