With AI and possible U.S recession, this Wall Street investor says stock markets may tank in 2025

economictimes.indiatimes.com:

stock markets set the alarm bells ringing, causing great concerns to all kinds of investors, stock brokers, and all stakeholders. But it is not the end of the story. Talking to CNBC in an interview, investor and strategist David Roche said he apprehends the economy to enter a bear market in 2025. He pointed out that the economy would be driven by the smaller-than-expected rate cuts by the Federal Reserve and it would not be able to stop the US economy slipping into a recession as predicted now.

Bear market is coming in 2025

According to the CME FedWatch Tool, the Federal Reserve’s median forecast for 2025 is 4.1%, but what the market expects is 3.5%, much below the level where the bank rates may be stabilized ultimately. Roche warned that the second contributing factor would be the profits, which won’t fulfill expectations as the US economy would turn sluggish. According to Roche, the third reason is the Artificial Intelligence, or the AI, that has “entered bubble terrain decisively.” It will exit in the next six months and will become one of the main drivers of slower economic growth.

Roche predicted these three factors would cause a bear market of minus 20% in 2025 and it may start by the end of the the present year itself.

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When will the Federal Reserve cut interest rates?

A poorer-than-expected jobs report stoked recession fears, and things worsened after the Federal Reserve did not announce a cut in the interest rates. Though Fed Reserve