Experts warn about the risk of a recession in the United States in 2022

Investor and billionaire Jeffrey Gundlach, specializing in bonds, said that the American market has recently seen signs of an economic recession.

In particular, data on consumer sentiment was released on Friday, which fell to a new low in a decade (61.7 points). As a rule, this leading indicator effectively demonstrates where the economy is moving in the future. Gundlach notes that the decline in sentiment, combined with the lack of new economic incentives and the expected tightening of the US Federal Reserve policy, does not bode well.

Another indicator of a recession is the yield curve, which tracks the difference between short-term and long-term interest rates. At the same time, the inversion of the yield curve, in which short-term rates are higher than long-term rates, is considered a clear warning of the inevitability of a recession.

To date, the yield between 10-year Treasury bonds and 2-year Treasury bonds is within 50 basis points. The expert believes that the Fed's current position does not bring much benefit, since the central bank is still expanding its balance sheet by buying bonds and has not yet raised rates. Gundlach believes that the Fed should have stopped quantitative easing a year ago. 

Also, signs of an approaching recession include the beginning of a slow expansion of credit spreads, which indicates a decrease in confidence that some companies can service their debts.

However, despite the negative forecasts, the investor identified one area that could stay afloat – emerging market stocks. To date, this is the only area that can demonstrate strong growth in the near future.