Recession Watch: Global recession more likely

There’s no question what everyone’s thinking about these days. In this weekly update, we gather recession-related news so that you don’t have to. Are we at rock bottom yet? Who’s winning or losing? How are companies reacting, and how should you react? Read on to find out.

Image credit: Timmy Loen

Is it over yet?

Global yield curve inverts

The yield curve for global bonds has inverted for the first time in two decades, according to Bloomberg. Bond yield curves have been seen as a strong predictor of recessions.

The same news report says that Germany may have already entered a recession, citing a Deutsche Bank analysis.

US sends mixed signals

Ask 10 people to vote on whether the world’s largest economy will enter a recession, and you might get diverse answers.

Mixed signals are aplenty. Retailers are exceeding their earnings forecasts while business activity has shrunk for four consecutive months.

Last week, we wrote that Morgan Stanley thinks the US may avoid a recession.

But a key indicator for the country’s manufacturing industry is showing a contraction. Jobless claims are inching up too. Deutsche Bank, meanwhile, thinks the US will enter a recession by the middle of 2023.

And previously, US Federal Reserve officials are expecting to lower interest rate increases soon, raising hopes that this could give the economy a desired soft landing.

However, those hopes were dampened this morning when Fed officials signaled that hikes will stay aggressive to curb inflation. The S&P 500 tumbled by 1.5% for the day.

Asia is optimistic, for the most part

In many parts of Asia Pacific, economic growth is expected to be a given, even if it might slow down.

Ups and downs

Recession-proofing