The shadow of recession continues to loom over the economy, with Goldman Sachs the latest to add its voice to those suggesting a downturn will occur within the next two years.
Chief economist Jan Hatzius says the aggressive rate hikes planned by the Federal Reserve could end in recession due to the tentative nature of the job market and economic recovery post-COVID. The US government will find the path to avoiding recession a tricky one experts believe thanks to a confluence of several problems. Investment strategist Lyn Alden says, “It looks like the U.S. is in a war now, because of our high national debt, super high inflation and a possible recession that could become a crisis. It’s like wartime finance… If you have this high a debt level, and structural problems with the supply chains in your commodities and your economy, you are stuck between a rock and a hard place.”
Goldman Sach’s projections indicate a 35% risk within 24 months, dropping to a 15% risk if one is avoided for the next 12 months. They join Bank of America and Deutsche Bank in their belief that the expected economic hit will happen in the short to medium term.
Historically, gold prices rise in times of economic depression or recession, meaning that the bulls could be on the cusp of yet another sustained run. Ensure your investment has safe haven status when the downturn hits.
