US economy enters recuperative stage
The chief economist of Bank of New York Mellon, Richard Hoey, believes the US is in a financial crisis but has moved into what he describes as “a recuperative stage”.
Hoey has used his latest economic update to suggest that the US economy and the broader market are faced with a long, slow haul out of their current downturns and that we have not seen the end of negative data, albeit that recession seems less likely.
“The US economy should experience a continuing slowdown over the next several quarters, rather than either a sustained rebound or a severe economic recession,” he said.
Indeed, Hoey’s view appears to be that the US economy will only really begin its climb out of the doldrums around the end of next year, with his analysis suggesting that house prices will still be in decline into the first half of 2009 and that the most likely path for the Federal funds rate is a prolonged stall followed by an uptrend over the course of 2009.
AUTHOR
Mike Taylor
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