Title: Lazard Frères Gestion Highlights Fears of Recession in the United States
Date: June 21, 2023
In its June outlook, Lazard Frères Gestion, a prominent asset manager, has emphasized the persistent concerns regarding a potential recession in the United States. While recent data on April activity and May employment indicate a solid economic performance, Lazard Frères Gestion argues that they do not reflect exuberant economic activity. The asset manager points out that several indicators, which typically predict a recession, continue to deteriorate, thereby increasing the likelihood of an imminent tipping point.
One of the key indicators highlighted by Lazard Frères Gestion is the new orders component of the purchasing managers’ index (PMI) for the manufacturing sector, which has fallen to 42.6. This level is typically associated with a recessionary period. Similarly, the PMI services index currently stands at 50.3, further indicating a potential economic slowdown.
Given this context, the Federal Reserve has decided to pause its rate hikes. Lazard Frères Gestion suggests that the Fed believes it has taken sufficient measures to push the economy towards a recession but wants to avoid easing financial conditions too soon. By maintaining the threat of further rate hikes, the Fed aims to ensure that the economy does not slip into a recession prematurely.
Lazard Frères Gestion’s analysis underscores the ongoing fears of a recession in the United States. While economic activity remains solid, the asset manager highlights the deteriorating indicators that typically precede a downturn. The Federal Reserve’s decision to pause rate hikes aligns with their belief that they have done enough to steer the economy towards a recession, while also avoiding premature easing of financial conditions.
As the United States navigates these uncertain economic times, market participants and policymakers will closely monitor future data releases and the actions of the Federal Reserve to gauge the trajectory of the economy and the likelihood of a recession.
How does the Federal Reserve’s decision to halt rate hikes align with Lazard Frères Gestion’s analysis and their belief that the economy is heading towards a recession
Lazard Frères Gestion Raises Concerns About Recession in the United States
In a recent outlook report, Lazard Frères Gestion, a well-known asset manager, has highlighted the growing fears of a potential recession in the United States. Despite positive data indicating solid economic performance in April and strong employment numbers in May, Lazard Frères Gestion argues that these indicators do not reflect a robust economic activity level. The asset manager points out that several indicators, which typically serve as predictors of a recession, continue to deteriorate, increasing the probability of an impending tipping point.
One of the key indicators of concern, according to Lazard Frères Gestion, is the new orders component of the purchasing managers’ index (PMI) for the manufacturing sector, which has dropped to 42.6. Historically, this level has been associated with recessionary periods. Additionally, the PMI services index currently stands at 50.3, further indicating a potential economic slowdown.
In response to this context, the Federal Reserve has chosen to halt its rate hikes. Lazard Frères Gestion suggests that the Fed believes it has implemented sufficient measures to nudge the economy into a recession, but wants to avoid prematurely easing financial conditions. By maintaining the possibility of future rate hikes, the Fed aims to ensure that the economy does not slip into a recession too early.
Lazard Frères Gestion’s analysis underscores the persisting concerns about a recession in the United States. While economic activity remains steady, the asset manager highlights the worsening indicators that typically precede an economic downturn. The Federal Reserve’s decision to pause rate hikes aligns with their belief that they have taken adequate steps to guide the economy towards a recession while avoiding premature easing of financial conditions.
During these uncertain economic times, both market participants and policymakers will closely monitor upcoming data releases and the actions of the Federal Reserve. These observations will help to assess the trajectory of the economy and the likelihood of a recession.
It is concerning to see that fears of a recession still linger in the United States. We must closely monitor the economic indicators and take necessary measures to mitigate any potential downturn.