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Will the U.S. Get Hit With a Recession in 2024?



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Will the U.S. Get Hit With a Recession in 2024?

Will the U.S. Get Hit With a Recession in 2024?

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For much of the last year, recession fears have been building against a sharp rise in interest rates and market uncertainty.

Only recently has there been a shift in sentiment. Given the resilience of the U.S. economy, a growing amount of investors are seeing an increasing likelihood of a soft landing—where the Federal Reserve raises interest rates to combat inflation without triggering a recession. However, many still remain cautious.

This graphic shows U.S. economic forecasts across Wall Street, Main Street, and C-Suite for 2024.

The Probability of a Recession in 2024

Here’s what key players are projecting for the economy:

ForecasterEstimated U.S. Recession Probability (Next 12 Months)
Federal Reserve Staff0%
Yield Curve*61%
Goldman Sachs15%
Bank of America35-40%

Source: Federal Reserve Bank of New York, Wolters Kluwer, The Conference Board, Goldman Sachs Investment Research, Bank of America. Data based on surveys and projections conducted August-September. *Based on a New York Fed model estimating recession probabilities using 10-year minus 3-month Treasury yield spreads, based on data from 1959-2009. **Conference Board Q3 CEO survey probability of a recession over the next 12-18 months.

In July, the Federal Reserve staff announced that they were no longer forecasting a recession in 2024, marking a sharp departure from earlier projections.

While the Fed staff continue to share a brighter outlook, the yield curve spread between 10-year and 3-month Treasury rates suggests there is a 61% change of a recession in the 12 months ahead. Historically, the yield curve has been a reliable predictor of recessions, based on a New York Fed model which uses data from 1959-2009.

Meanwhile, a survey of economists by Wolters Kluwer shows that they’re split, with 48% calling for a recession over the next 12 months.

Across Main Street, consumers share a more cautious sentiment, with over 69% saying that a recession is likely in the next year, based on a Conference Board survey.

Yet corners of America’s C-suite have grown more positive. Goldman Sachs recently dropped its recession forecast to a 15% likelihood while Bank of America gives it a 35-40% odds. On the other hand, 84% of CEOs are preparing for a recession in the next 12-18 months, a drop from 92% seen in the second quarter of 2023.

Bull Case vs. Bear Case Signals

Among the key factors investors are closely watching center around the impact of higher interest rates on the economy.

For the bull case, higher rates appear as though they haven’t significantly impacted consumer spending yet, although spending has slowed on non-essential items. Retail sales continue to be solid, and earnings across Home Depot, Walmart, Lowe’s, and other major retailers show resilience. Where the main changes are occurring are with consumers purchasing more affordable options.

However, consumers are relying increasingly on borrowing for spending.

For the bear case scenario, household debt has hit record highs of $17 trillion in March, rising 19% year-over-year. Higher rates have led these borrowing costs to jump, likely affecting household budgets. Meanwhile, corporate defaults have accelerated in 2023, and are projected to keep rising.

Overall, there are mixed signals across the wider economy, and it’s unclear if the country will experience or avoid a recession in 2024. Quantifying the full effects of higher interest rates on consumers and businesses remains an open question.

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Investor Education

An Investor’s Guide to Copper in 3 Charts

Explore three key insights into the future of the copper market, from soaring demand to potential supply constraints.



An investor's guide to copper in 3 charts



The following content is sponsored by iShares

An Investor’s Guide to Copper

Copper is the world’s third-most utilized industrial metal and the linchpin of many clean energy technologies. It forms the vital connections in our electricity networks, grid storage systems, and electric vehicles.

In this graphic, sponsored by iShares, we dig into the forces that are set to shape the future of the copper landscape.

How Much Copper Do We Need?

Copper is poised to experience a remarkable 54% surge in demand from 2022 to 2050.

Here’s a breakdown of the expected demand for copper across clean energy technologies.

Technology2022 (kt)2050P (kt)
Electricity networks43648862
Other low emissions power generation93.7142.2
Solar PV756.81879.8
Grid battery storage24.6665.2
Wind453.5 1303.3
Hydrogen technologies-0.22
Electric vehicles370 3582.9
Other uses19766 22382

Copper is vital in renewable energy systems such as wind turbines, solar panels, and electric vehicle batteries because of its high electrical conductivity and durability.

It ensures the effective transmission of electricity and heat, enhancing the overall performance and sustainability of these technologies.

The rising demand for copper in the clean energy sector underscores its critical role in the transition to a greener and more sustainable future.

When Will Copper Demand Exceed Supply?

The burgeoning demand for copper has set the stage for looming supply challenges with a 22% gap predicted by 2031.

Given this metal’s pivotal role in clean energy and technological advancements, innovative mining and processing technologies could hold the key to boosting copper production and meeting the needs of a net-zero future.

Investing in Copper for a Prosperous Future

Investors looking for copper exposure may want to consider an ETF that tracks an index that offers access to companies focused on the exploration and mining of copper.

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