Downside risk looms over soft landing consensus | Ausbiz

Is a soft landing in the US a done deal? Isaac Poole from Oreana Financial Services says there’s probably a lot more downside risk out there than than what the soft landing consensus is accepting.

Isaac notes signs of tension in the labor market, a manufacturing PMI approaching a recessionary phase, and the limiting effects of interest rates as advanced indicators of a seldom recognized downside risk. He anticipates a recession to surface next year, possibly decelerating growth below the trend and potentially even further by the second quarter. He questions the market’s anticipated 1% of rate cuts by the end of next year, foreseeing a feasible 3% to 4% instead.

Isaac also voices apprehension about the market’s underestimation of a recession risk. He advises investors to re-evaluate their fixed-income portfolio since the current spreads provide inadequate risk compensation for this stage of the economic cycle. He also anticipates a potential increase in the US dollar in the near term, proposing that portfolios should integrate gold as a key diversifying asset, given the possibility of real yield declines. Isaac suggests a thorough review of asset allocation amid these uncertain circumstances.

(Source: Ausbiz)

Click here to watch the interview.

Contact Us
I'm interested in
Privacy Policy

Insights

All Insights

Read our latest insights to help you make better investment decisions and build stronger portfolios.

A Licensed Financial Firm

In Hong Kong we are licensed by the Securities and Futures Commission (license no. AHX191), the Insurance Authority (license no. FB1443) and the Mandatory Provident Fund Authority (license no. IC000563). 

In Australia we are licensed by the Australian Securities and Investments Commission (AFSL No: 482234, ABN 91 607 515 122).

Financial Services Guide

Complaints Policy

General Advice Warning

Disclaimer