The U.S. stock market is near record highs, and the labor market has been growing steadily, courtesy of stable economic readings throughout 2019. However, the good times can’t last forever, and billionaire investor Howard Marks at Oaktree Capital warns that a recession will eventually arrive.
The question is: When?
Speaking in a CNBC interview, Marks criticized the Federal Reserve for cutting interest rates after a decade of economic growth, though he said the policy adjustment could prevent a recession from seizing the market within the next 24 months.
“If your goal is to make sure we don’t have a recession this year, next year … (then) maybe you want to cut rates. Ten years later, do you want to cut rates to extend an economic expansion which is the longest in history? I question whether that’s a legitimate goal,” he said.
Hear that, investors? You’ve got two years.
After that, all bets are off.
Marks Remains Positive on the U.S. Economy – For Now
The U.S. and China have seen significant – if uneven – progress in the trade talks in recent weeks, renewing optimism that the two sides will emerge from next month’s negotiations with at least an interim deal.
Still, the negative effects of the trade war on major industries, particularly manufacturing, remain immense and have put the manufacturing sector at risk of entering a full-blown recession.
ING chief economist James Knightley said that the U.S. manufacturing sector rebounded in August, but the recovery is not sustainable, indicating that some of the major industries in the U.S. are likely to continue struggling.
“This rather gloomy story is already evident in the ISM manufacturing survey,