The Fed could cause a recession unless it significantly cuts rates, top Stifel strategist says.
Key Points
Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee meeting in Washington, D.C., on Wednesday, July 31, 2019.The next recession in the U.S. could be triggered by still-restrictive Federal Reserve policy unless the central bank makes a committed and sustained effort to lower interest rates, Stifel's Barry Bannister says.
Recession fears have risen recently amid warnings from the bond market while the U.S.-China trade war rages on. This has led to a sharp rise in stock market volatility over the past month. The 10-year Treasury note yield is currently trading below its 3-month counterpart. This is a phenomenon called a yield-curve inversion. Experts fear when the yield curve inverts because it has historically been followed by a recession.
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