Moody's economist believes that the US stock market may be able to avoid a recession, but entering a “moderate recession” is inevitable

Similarly, the US CB Business Leading Index shows a bleak outlook on the future of the US economy. Ten sub-indicators (shape of yield curves, housing activity, labor market data, etc.) that historically lead to a recession are interposed in the index, which suggests the possibility of entering a recession after 6 to 12 months.

There is also a possibility that a “moderate recession” will come　

Under such circumstances, Mark Zandi is somewhat optimistic about the future of the US economy, unlike the pessimists who have become mainstream. With the Fed's skillful skills, it was decided that the US stock market could resist inflation without falling into a serious recession. Also, while the economic slump will definitely arrive in 2023, it is also stated that inflation can be eradicated without causing a recession while the Fed is struggling to control inflation, which remains high.

He also said that the US stock marketLong-term decelerationWhile showing the possibility of entering a “moderate economic recession,” which means,without leading to a recessionThey commented that investors and consumers would be provided with a soft environment that can cope with a gradual economic recession.

On the other hand,“Self-fulfilling prophecies”Mark Zandi is worried that pessimistic views will spread throughout the US stock market due to this. In other words, in order to protect themselves from predictions that a recession will occur, consumers and companies will eventually lead the US stock market into recession through refraining from spending and investment.

The US financial system is extremely healthy

According to the memo announced by Mark Zandi on the 3rd,American households have maintained their soundness from savings trendsThen,Companies are in an environment blessed with profitability even though profit margins are lowIt is written.

The US banking system has a stronger financial base compared to decades ago. At the moment, bank credit is neither too much nor too little,Has sufficient equity capital. Other than this, unlike the previous recession, the current oneVacancy rates are low in the housing marketIt was covered by sufficient tax revenueThe authorities' finances are also healthyThere are optimistic conditions, etc. It became clear in his memo that the fundamentals of the US economy are so firm that a recession can be avoided in the rice market.

“What is unknown” becomes a risk

Risks named “unknown things” by Mark Zandi are overflowing in the US market. The Fed's missteps, debt ceilings, geopolitical rivalries, and many other known factors are also included. It is difficult to anticipate changes in market prospects due to these factors. Mark Zandi issued a final warning saying, “If something different from the script breaks out, timid consumers and companies will quickly back down, and the US economy will fall into recession.”