Is there a fear of recession in the U.S? Here's all you need to know
Federal Reserve did not cut the bank rates and kept them at their highest levels in two years, indices of major stock exchanges tumbled, sending strong signals of approaching recession Thursday, reports CNBC. While 30-stock Dow Jones fell 494.82 points, or 1.21%, to end at 40,347.97, the S&P 500 slipped 1.37% to end at 5,446.68. Similarly, the Nasdaq Composite lost 2.3% to settle at 17,194.15. Besides, other data also triggered the general apprehension of an impending recession that the US economy is heading to. While unemployment data continued to rise and reached its highest level since August 2023, the ISM manufacturing index, came down at 46.8%. The barometer of factory activities in the US is at its worst level, further signaling economic contraction. The 10-year Treasury yield followed these parameters and dropped below 4% for the first time since February 2024.
Fed Chair Jerome Powell indicates September cut
Though Fed Chair Jerome Powell indicated a cut in the interest rates in September, economic experts believe it is too late and too little to assuage the frayed situation. Talking to CNBC, Chris Rupkey, Chief Economist at FWDBONDS, said that Thursday’s data hinted at an economic downturn amid the volatility. Elaborating on it, he said that the stock market doesn’t know whether to laugh or cry because while three Fed rate cuts may be coming this year and 10-year bond yields are falling below 4.00%, the winds of recession are coming in hard.
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