Just because many experts expect the Federal Reserve to start raising interest rates, Marc Faber, the editor and publisher of the Gloom, Boom & Doom Report, urges you to avoid being tricked that the economy has rebounded for good.
In fact, just quite the opposite.
"We could very well be in a recession in the U.S. within six months," he recently told CNBC.
A recession is technically defined as two straight quarters of negative GDP growth. The economy contracted 0.7 percent in the first quarter.
Meanwhile, the Atlanta Fed maintained its forecast that the economy grew 1.9 percent in the second quarter in an update to its GDPNow tracker.
But don’t believe talk that the central bank will start raising rates anytime soon.
"I doubt they would increase rates this year. I think they'll keep rates at essentially zero,"he said.
"[Fed Chair Janet] Yellen said very clearly that the rate hikes are data-dependent, and data is globally getting worse, it's not getting any better," he said.
"I don't think the U.S. economy is doing particularly well," he said.
"One of the problems is affordability, and cost-of-living increases. For most households, the cost of living has gone up very substantially and so their spending power is limited," he said.
"In addition to that if you look at tax revenues in the U.S., corporate tax as a percent of GDP is essentially flat. However, what has gone up a lot as a percent of GDP is individual taxes, so it has some negative impact on the economy," he said.
"I've had this negative view for quite some time," Faber said. "But whereas before I expected roughly a 20 percent correction, which is nothing compared to where we came from," he said. "I would expect something more serious to occur."
Meanwhile, the first-quarter GDP contraction, the country’s third in the aftermath of the Great Recession, “provides a troubling picture of an economy that many figured would get a lift from cheap oil, rapid hiring and growing consumer confidence,” The Washington Post reported.
“Instead, consumers have proved cautious, and oil companies have frozen investment — all while a nasty winter caused havoc for transportation and construction and a strong dollar widened the trade deficit.”
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