The risk of a US recession is rising, say investment chiefs at two of the world’s largest asset managers, in contrast to government officials and a growing number of investors who believe the Federal Reserve’s interest rate rises will not damage the economy significantly.
The US economy has largely looked resilient in the face of aggressive monetary tightening by the Fed. But cracks were now appearing, notably in the labour market, top fund managers at BlackRock and Amundi told the Financial Times.
“The probability of a recession for us is very high,” said Vincent Mortier, chief investment officer at Amundi, which manages $2.1tn. “The question mark is how deep and how long . . . We are much more concerned by the dynamics in the US than the consensus,” he said, adding that he expected the contraction to come at the end of this year or early next year.