Richard Harris, the Chief Executive of Port Shelter Investment Management believes the US is currently in a goldilocks scenario, but there is a looming threat of a recession going forward.
In a chat with CNBC-TV18, Harris said, the US is enjoying a delicate balance, which bodes well for the continuation of the bull market.
"There are lots of indications that we could see a recession further down the line. But Powell (US Fed Chair Jerome Powell) is not talking about reducing interest rates yet, and the economy still seems to be going. So, we are in a situation where this bull market is dying hard," Harris said.
Also Read
Despite the favourable conditions, there are several indications that the economy could face challenges in the future, he said. However, he stated that the Federal Reserve Chairman, Jerome Powell, has not yet discussed reducing interest rates, suggesting that there is still room for growth in the economy.
During his speech to the Economic Club of New York on October 19, Jerome Powell said, while inflation has eased the Fed remains 'resolute' to meet its committed 2% inflation mandate. He gave no hints pointing to an interest rate hike and refrained from outlining a clear policy direction.
US bond yields spiked close to the 5%-mark following Powells's comment,
The Indian market, Harris believes, "tends to do well when the world's economy has been well, and if we do see a big slowdown in the West, then obviously that is going to impact India.”
Indian benchmark indices -- Sensex and Nifty50 -- were both trading half a percent lower in afternoon trade.
Earlier this week, Jahangir Aziz, Global Head-EM Economics at JPMorgan told CNBC-TV18 that he does not rule out the possibility of the US diving into a deeper recession but emerging markets can be in trouble only if the US dollar strengthens.
For more details, watch the accompanying video
(Edited by : Shweta Mungre)
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
