As 2023 comes to a close, economic indicators point to a tumultuous 2024, said David Rosenberg, president of Rosenberg Research.
Rosenberg predicts a recession is imminent, but says it is a natural stage in the business cycle.
“Next year is going to be a recession year. It’s not the end of the world. It’s part of the economic cycle, and next year is going to be a hard landing,” Rosenberg told Kikko News anchor Jeremy Zaffron. I told Mr.
Rosenberg’s grim outlook for 2024 is based on specific economic indicators and warns investors to be wary of optimistic financial news.
The economist noted that America’s alarmingly low savings rate is a significant sign that the consumer economy is becoming less resilient. “Who would have ever imagined that we would be sitting here today with a personal savings rate of 3%?” he said, emphasizing the historical anomaly of this situation. “Historically, Americans put 10 cents of every after-tax dollar they earned into a piggy bank. Now they’re putting in 3 cents.”
Rosenberg is also keeping a cautious eye on the real estate sector, predicting a severe cycle of delinquencies and defaults. “We will be in a cycle of severe arrears and defaults… A lot of assets will be transferred from weaker hands to stronger hands, but there will be very severe real estate deflation,” he said. , emphasized the potential. Be prepared for a dramatic drop in real estate values.
For a detailed analysis of Rosenberg’s 2024 recession predictions, visit Watch the video above.
Fixed income and bullion barbell strategy: Embrace the gold peak
Given the economic uncertainty in 2024, Rosenberg favored a bond and bullion barbell strategy.
“My theme is bond bullion barbells.” [strategy]…We want to own bonds,” he said, noting their suitability in a declining interest rate environment. As Rosenberg suggests, a fixed income barbell strategy consists of half the portfolio consisting of long-term bonds and the other half short-term bonds, and this setup is complemented by gold investments, allowing inflation and market provides a hedge against the uncertainty of
With gold trading nearing record highs, Rosenberg emphasized the strategic role of gold in investment portfolios. “As far as gold goes, I was very impressed…before the latest report on how well gold is performing.”
Gold’s strong performance, especially as a hedge against inflation, complements the stability and predictability of bonds. He noted that this approach has been historically successful under similar financial conditions. Rosenberg highlighted the value of gold, especially its strong performance in an uncertain economy, and emphasized its role as a reliable asset for risk mitigation and portfolio diversification.
Learn more about the relevance of this strategy to the current economic climate Watch Rosenberg’s detailed explanation in the video above..
Interest rate outlook for 2024
With only one monetary policy meeting left this year, all eyes are on the Fed’s interest rate strategy, and Wall Street is sharply divided on its outcome.
Bill Ackman, CEO of Pershing Square Capital; Mr. Rosenberg expects an early rate cut by the first quarter, but Mr. Rosenberg is taking a more cautious approach and predicts a rate cut in May. “The last time the Fed raised rates was in July. If they skip December, which they seem to have to do…the Fed will be on the sidelines for five months.” Based on past trends, the Fed’s next action is always to cut interest rates, Rosenberg added.
Hear Rosenberg’s thoughts on the Fed’s 2024 interest rate decisions in full video above.
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