One of the world’s most well-regarded investors has asserted the US is “guaranteed” to be hit with a recession in 2024.
Jeremy Grantham, the co-founder of investment giant Grantham Mayo Van Otterlloo (GMO), asserts an economic downturn is more likely to take place despite many investors and financial organizations suggesting otherwise.
Citing the Federal Reserve’s recent claim a recession will be avoided, he claims this prognosis is “almost guaranteed to be wrong”.
Mr Grantham reportedly manages $65billion in assets and has a stellar track record of predicting market crashes.
He accurately predicted the 2001 dot com crash and the 2008 Global Financial Crisis before they took place.
In an interview with Bloomberg earlier this month, Mr Grantham shared his thoughts on the state of the US economy.
According to the legendary investor, the US “will have a recession perhaps deep into the next year and an accompanying decline in stock prices”.
The investing expert explained: “The Fed’s record on these things is wonderful. It’s almost guaranteed to be wrong.
“[The Federal Reserve] has never called a recession, particularly not ones following the great bubbles.”
Earlier this month, the central bank revised its projections about its previous forecast of a recession towards the end of the year.
However, the Fed has reiterated its commitment to further interest rate rises in an attempt to mitigate the damage of inflation on the economy.
Mr Grantham contends that the Federal Reserve will not accept responsibility for the potential economic downturn.
The investor added: “They took credit for the beneficial effect of higher asset prices on the economy.
“But they have never claimed credit for the deflationary effect of asset prices breaking – and they always do.”
Among the other major investors who agree with Mr Grantham’s viewpoint are Peter Schiff, Robert Kiyosaki and Danielle DiMartino Booth.
While speaking to Bloomberg, the investor legend claimed that inflation would never reach the Fed’s two percent target.
