- Morgan Stanley, UBS and Wells Fargo all said that a
recession became more likely last week. - Ordinary Americans seem to agree, with consumer sentiment polls plummeting.
One word dominated
Equity chiefs like $4, economists like $4, and billionaire investors like $4 all warned this week that an economic downturn is becoming more likely.
"[Rising rates] raises the risk of a recession, because you're bringing rate hikes forward even faster," $4. "The Fed is hiking into a slowdown, and they don't really have a lot of options."
The Fed is hiking interest rates as it looks to tackle soaring
UBS became the latest bank to predict an economic downturn Friday.
"The more aggressive line by central banks adds to headwinds for both economic growth and equities," the Swiss bank's chief investment officer Mark Haefele said. "The risks of a recession are rising, while achieving a soft landing for the US
And away from Wall Street, ordinary Americans are starting to fret about the economy as well.
The $4, which measures
"The crash in sentiment means that consumers are more and more worried about future economic conditions," LPL Financial's chief economist Jeffrey Roach said. "Recession risks are rising for next year, especially if high prices get entrenched in the economy."
Consumer sentiment has typically been used as a gauge of future consumer spending, which accounts for roughly three quarters of gross domestic product.
Sliding consumer sentiment has coincided with dire numbers coming out of the retail sector, meaning $4. Consumers tend to spend less and save more when they're worried about the overall state of the economy, as evidenced by a slump in mortgage applications.
And investment bankers can learn a lot from how Main Street feels about the economy, according to LPL's Roach.
"We need to listen to what consumers say," he said. "But more importantly, we need to watch what consumers do."