Veteran investor David Roche expects a bear market in 2025, caused by smaller-than-expected rate cuts, a slowing U.S. economy and an AI bubble.
Jerome Powell, chairman of the US Federal Reserve, during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, DC, US, on Tuesday, July 9, 2024.Veteran investor David Roche expects a bear market in 2025 caused by smaller-than-expected rate cuts, a slowing U.S. economy and an artificial intelligence bubble.
"I think there is enough in those three factors to cause a bear market of minus 20% in 2025, maybe starting at the end of this year," he said, adding that the prediction does not factor in who will win the U.S. Presidential election in November.
"If you want the Fed to reduce interest rates, then the economy has to slow down interest, labor markets have to slacken off, and margins will come under pressure," he said.