According to a forecast by a Wall Street veteran, a recession is expected to hit the U.S. economy next year, leading to a significant impact on stocks and house prices.
Business Insider reported that in a recent webcast by Rosenberg Research, Harley Bassman, managing partner of Simplify Asset Management, provided this grim prediction.
On the impending recession, Bassman predicted, “The Fed’s done or close to being done. We’re going to get the inflation down, but it’s still a year away because we have not gone into that maturity wall yet.”
Bassman, who has held roles at firms such as Merrill Lynch, PIMCO, and Credit Suisse, also compared inflation to the silent but deadly effect of carbon monoxide.
Bassman stated, “Inflation is nothing more than a slow-motion default. It’s a nice tax, nice in the sense that it’s quiet and silent. It’s kind of like CO poisoning in your house. You can’t feel it, and it goes across everybody.”
He further indicated that the housing market would not see an immediate fall in prices as homeowners are locked into their current mortgages.
He stated, “You can’t move unless your house burns down, because you can’t refinance at 7%. You already have a 3% mortgage. So that’s why prices aren’t going down.”
Bassman also highlights his previous experience of ignoring warnings about the mid-2000s housing bubble.
Photo by faithie on Shutterstock
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