The BlackRock Investment Institute (BII) predicted central bank measures to manage inflation might cause a recession and market selloff later this year or in 2024, creating investment opportunities.
Washington talks to raise the $31.4 trillion U.S. borrowing cap may cause market instability. As a result, the institute claimed buying the dip no longer works.
“Rate cuts are not on the way to help support risk assets,” it said. “Recession is foretold as central banks try to bring inflation back down.”
Any selloff may help risk assets price in the economic damage the institute expects from interest rate hikes.
“We’re ready to shift our views on a six-to-12-month horizon to take advantage of opportunities that may appear,” it stated.
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