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ARK Invest\u2019s Cathie Wood says a recession will hit the US in 2024 due to what she believes was overly aggressive interest rate hiking from the Federal Reserve.<\/p>\n
In a new YouTube update, Wood says that the US is already in a \u201crolling recession,\u201d or a downturn that affects certain sections of the economy at a time.<\/p>\n
Wood says that the economy will enter an official recession at some point this year as various sets of economic data start flashing red.<\/p>\n
\u201cWe\u2019ve been in a rolling recession for roughly two years now. The number of housing measures are down 40%. New existing home sales are as low as today as they were at roughly the depths of the 2008-2009 crisis. <\/em><\/p>\n We\u2019ve seen auto sales not get back to the normal 17.5-18 million unit range. We\u2019re in that 15.5-16 range, so that\u2019s recession-like. <\/em><\/p>\n Commercial real estate is in a world of hurt, and I think what\u2019s going to happen now is, that companies are losing pricing power, and they\u2019re going to have to cut prices. They see that when they don\u2019t cut prices, their units fall apart.\u201d<\/em><\/p>\n When the recession hits, the investor says it won\u2019t be as bad as the Great Financial Crisis of 2008, but it will be enough to push the Fed to pivot into a low interest rate environment.<\/p>\n \u201cIn order to salvage margins, what will [the companies] do? They will start cutting back on employment, and the unemployment will continue to go up. It\u2019s still at very low levels, but it has turned the corner. I\u2019m not thrilled about that. I just think the Fed overdid it. I don\u2019t think this was necessary but we do think it\u2019s going to happen. <\/em><\/p>\n The recession will not be as serious as 2008 or 2009, nothing like it at all, partly because we\u2019ve been through a rolling recession and this will be the tail end of it. So that too, will move the Fed and so we think interest rates are going to surprise on the low side of expectations as inflation and real growth surprise on the low side of expectations \u2013 in an election year, so that\u2019s pretty interesting.\u201d\u00a0<\/em><\/p>\n