Market bear David Rosenberg said a recession will hit the United States within twelve months, despite efforts by the U.S. Federal Reserve to cut interest rates and boost the economy.
According to CNBC, Rosenberg noted that the "economy is already slowing down," adding that U.S. earnings are contracting, further proving that the world's largest economy could be heading towards a financial downturn.
Rosenberg also took a jab at Fed Chairman Jerome Powell's comments earlier last week. Powell said the Federal Reserve will only make a move to stimulate the economy if data proves that there are weaker outputs.
For Rosenberg, the only reason why the Fed and other analysts are optimistic about the U.S. economy is due to the Fed's efforts. He went on to predict that the Federal Reserve will further cut rates sometime October and December "and through 2020."
Unlike other market analysts who believe the U.S. economy is doing just fine, Rosenberg said it won't be long until the Fed realizes that even if it goes down to zero on interest rates, there will still be a recession.
Amid increasing optimism for the U.S. economy following developments in the China-U.S. trade war last week, some analysts have joined the bear circle, echoing Rosenberg's statements about a recession underway.
Last week, Deutsche Bank Chief Global Strategist, Binky Chadha, pointed out that the SE&P 500 SPX appears to be ignoring red flags in the U.S. economy. According to MarketWatch, Chadha said the bank argues that the world's economic leader is "dangerously close to...tipping into recession."
Chadha provided points for his argument. He said growth in U.S. jobs contracted to 1.3 percent in August - a significantly huge percentage compared to 2.5 percent in mid-2018.
Like Rosenberg, Chadha said the Fed's upcoming interest rate cuts won't really help drive the economy back to its giant state since the country's equity market has gone ahead of its supposed growth.
Meanwhile, other analysts have stuck to their stance on the U.S. economy doing well despite the trade war and a souring global outlook. Their optimism stems from last week's data, suggesting that several economic drivers displayed growth last month.
Reuters reported that home resales spiked last month to a record-high for the past 17 months. Manufacturing and housing, two weak drivers in the American economy, have also started stabilizing.
Powell said after the data was released that he is expecting the economy to grow moderately. He noted, though, that trade disputes with other nations are taking a toll on exports and investments to the country.
