Investing Expert Predicts ‘0% Chance’ US Avoids Recession in 2024 — Here’s Why
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Aja McClanahan
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Nicholas Morine
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TJM Institutional Services director James Iuorio predicts a “longer” economic lag this year. As he explained on Fox’s “Morning with Maria”: “From an economic standpoint, I think we are absolutely going to go into a recession.”
Although Wall Street and Main Street alike have been preparing for a recession since late 2020, to date, it hasn’t fully manifested. In fact, many have been left wondering if all the “Chicken Littles” claiming the sky is falling will ever see these recession predictions come to pass.
Iuorio contends that we haven’t felt the full brunt of the recession due to government spending. Laying out money for jobs, economic stimulus payments and other financial incentives have ostensibly softened the blow of inflation and rising interest rates for many Americans.
Patching Over the Coming Recession?
Though the Fed’s interest rate hikes were supposed to reel things in some, Iuorio is convinced low housing inventory and companies’ hesitation to cut jobs on the heels of recent labor shortages have also muted the pains of a recession that should have come by now.
According to Iuorio, the economic “cracks in the wall” are starting to appear:
- Bank lending is down for three quarters in a row, per the St. Louis Fed.
- Credit card delinquencies are up, according to Fox Business.
- Auto loan delinquencies have increased, as Fox Business detailed.
Many investing experts and analysts, including Jaime Dimon and Howard Lutnick, agree with Iuorio that commercial real estate (CRE) will be hit hard and have a domino effect on the U.S. banking system. The combination of downsizing, slow uptake on return-to-work efforts and lack of commercial lease renewals could spell disaster for many maturing commercial loans — loans that will likely be refinanced at a much higher rate.
Iuorio’s final prediction is that significant defaults in the CRE space will send shockwaves through the U.S. economy and banking system, causing stocks to lose 10%-15% of their value (before a potential rally sometime in 2025), which, in turn, causes the Fed to act drastically — presumably bringing the country out of a recession.
Based on his predictions, he’d stay away from the stock market for a while and would prefer his holdings to be mainly in gold, silver and non-commercial real estate. However, he insisted that he’d jump back into the stock market when it recovers.
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