Bond Expert Bill Gross Predicts U.S. Recession, Points to Car Loan Issues and Banking Strain
Bill Gross, known as Wall Street’s ‘Bond King,’ predicts an approaching recession in the U.S. economy by the final quarter of the year.
He attributes this anticipated economic downturn to the growing problem of overdue car payments and the financial stress affecting regional banks. Despite recent stock market gains and a slight increase in inflation, the 10-year U.S. Treasury bond yield stands at 4.84%, prompting expectations of a 0.25% interest rate hike in the upcoming Federal Open Market Committee meeting.
Gross made his prediction on social media platform X, expressing concern about rising auto loan delinquencies and a slump in regional banks. Auto loan tardiness has surged, while single-family mortgage payment misses have not shown a consistent upward trend. Regional banks, heavily tied to commercial real estate, have faced significant challenges in 2023, and Gross suggests considering investment in the bond curve.
Clever Robot News Desk 26th October 2023
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