BCA Research Warns of Possible US Recession in 2025 and the Impact on International Stock Markets

The scars left by the Great Recession of 2008-2009 still linger, and the economic downturn caused by Covid-19 has dealt another blow to the US economy. Concerns about the stability of the financial markets are resurfacing, with BCA Research predicting volatility in the US stock market moving forward. According to Fox Business, BCA Research chief global strategist Peter Berezin has warned clients that the economy may fall into a recession either this year or in early 2025. Berezin predicts that the S&P 500 could drop to 3,750, a 30% decrease from current levels.

BCA Research’s prediction is based on several factors, including a slowing labor market and its impact on consumer spending. The relationship between inflation and unemployment, known as the “Phillips curve,” is also a key factor in his analysis. He explains that while the US avoided a recession in 2022 and 2023 due to an “immaculate disinflation” – an unexpected drop in prices – he expects this trend to reverse soon.

Berezin also forecasts challenges in the global economy, with notable slowdowns in growth expected in China and Europe. This could lead to increased pressure on international stock markets. Despite hitting a record high in mid-May, the Dow Jones Industrial Average has dropped from those peaks due to ongoing concerns about inflation and rising interest rates.

This grim prediction comes at the end of a turbulent year for both Wall Street and Telangana’s Chief Minister KCR (K Chandrashekar Rao). The recent dismissal of K Kavitha’s bail plea by Delhi High Court is seen as a setback for KCR’s political career.