A trader works on the floor of the New York Stock Exchange on August 23, 2019 in New York City. The three major US stock indexes ended lower, their fourth consecutive week with some declines. (Credit: Eduardo Munoz Alvarez/Getty Images )

Talk of a U.S. recession may be ‘premature’

The Dow Jones Industrial Average took a wild ride last month but one economist thinks that talk of a possible US recession is premature.

Peter Iglinski-Rochester • futurity
Sept. 4, 2019 1 minSource

A stock trader in glasses and a suit looks up at screens showing stocks

The Dow Jones Industrial Average took a wild ride in August, prompting some politicians and analysts to talk about the possibility of a US recession. But one economist thinks that may be premature.

The Dow dropped 865 points over the first five days of the month, then, after a brief recovery, slid another 800 points in a single day the following week.

But Narayana Kocherlakota, a professor of economics at the University of Rochester, says the more important economic indicators look good. At the same time, he says there are some warning signs in the bond markets. His biggest concern, however, has to do with how the Federal Reserve would react in the unlikely event of a recession. As he explains, the Fed doesn’t have a lot of ammunition to offset a serious downturn in the economy.

Here, Kocherlakota explains his thinking and discusses the slow down in the stock market:

The post Talk of a U.S. recession may be ‘premature’ appeared first on Futurity.

Share this article:

This article uses material from the Futurity article, and is licenced under a CC BY-SA 4.0 International License. Images, videos and audio are available under their respective licenses.

Related Articles: