The US stock market remains in muddy waters as the Ukraine and Russia war, Israel and Palestine conflict, and the Red Sea trade disruption can bring the economy down in 2024. Macroeconomist Henrik Zeberg warned that the US stock market could experience a bigger crash than 2008 in the coming months. The analyst highlighted several indicators that show the US economy walking on a thin rope since last year.
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A Bigger Financial Crash Than 2008 Could Hit the US Stock Market, Says Macroeconomist
According to Zeberg, the factors that could lead the US stock market to crash majorly include Yield inversion, higher interest rates for home buyers, an increase in consumers’ mortgage and debt, and less demand for inventories, among other various factors.
“Major Recession will set in. The Titanic has already hit the iceberg – and it will sink. There is nothing that can be done from the Fed or any administration,” he said.
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Zeberg’s analysis is based on the Business Cycle Model that predicts an upcoming recession. According to his expertise, this model, tracks the record accurately predicting recessions over 80 years. He explained that the leading indicators are crashing beneath their equilibrium line, and that points towards a recession.
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“As Interest Payments rise – Housing Affordability plummets. We are currently at levels below the situation going into the Financial Crisis. The only reason we don’t see the watershed moment yet is because the consumer has not lost his job yet! When the unemployment situation deteriorates a lot of people will lose their homes as default rates skyrocket,” he said.
Moreover, JP Morgan CEO Jamie Dimon has also predicted that the US stock market could tank in 2024 and 2025. Read here to know why JP Morgan’s CEO Dimon believes the US stock market will crash in the coming months.