Many major economies will hit recessions over the next 12 months amid a rise in the cost of living and tightening government policies, Nomura Holdings Inc has said in a report, according to Bloomberg.

The brokerage firm expects the EU, the UK, Japan, South Korea, Australia, Canada and the US to enter into a recession, thereby pushing the global economy into a synchronized growth slowdown, Rob Subbaraman and Si Ying Toh at Nomura said in a research note.

They said that the central banks are likely to err by tightening the monetary policy in a bid to rein in inflation at the risk of sacrificing growth before cutting rates in 2023.

“Increasing signs that the world economy is entering a synchronized growth slowdown, meaning countries can no longer rely on a rebound in exports for growth, have also prompted us to forecast multiple recessions,” they wrote.

Nomura forecasts that the depth of recession will vary among nations. In the US, a shallow but long recession of five quarters starting from the final quarter of this year. In Europe, the slump could be much deeper if Russia&nbsp;entirely cuts off gas to Europe, the economists said.&nbsp;

Watch |&nbsp;Gravitas: Several major economies stare at a recession

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The Japanese financial services firm Nomura sees both the US and the euro area economies contracting 1 per cent in 2023.&nbsp;

For mid-sized economies, including Australia, Canada and&nbsp;South Korea, there’s a risk of deeper-than-forecast recessions if interest rate hikes&nbsp;trigger housing busts, they said.

Japan is forecast to have the mildest recession of the group owing to ongoing policy support and its delayed economic reopening, they added.

China is an outlier as its economy recovering with the help of accommodative policies, though it remains at risk of renewed lockdowns as long as Beijing sticks to its zero-Covid strategy, they said.

(With inputs from agencies)

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Many major economies will hit recessions over the next 12 months amid a rise in the cost of living and tightening government policies, Nomura Holdings Inc has said in a report, according to Bloomberg.

Many major economies will hit recessions over the next 12 months amid a rise in the cost of living and tightening government policies, Nomura Holdings Inc has said in a report, according to Bloomberg. The brokerage firm expects the EU, the UK, Japan, South Korea, Australia, Canada and the US to enter into a recession, thereby pushing the global economy into a synchronized growth slowdown, Rob Subbaraman and Si Ying Toh at Nomura said in a research note. They said that the central banks are likely to err by tightening the monetary policy in a bid to rein in inflation at the risk of sacrificing growth before cutting rates in 2023. “Increasing signs that the world economy is entering a synchronized growth slowdown, meaning countries can no longer rely on a rebound in exports for growth, have also prompted us to forecast multiple recessions,” they wrote. Nomura forecasts that the depth of recession will vary among nations. In the US, a shallow but long recession of five quarters starting from the final quarter of this year. In Europe, the slump could be much deeper if Russia entirely cuts off gas to Europe, the economists said. Watch | Gravitas: Several major economies stare at a recession The Japanese financial services firm Nomura sees both the US and the euro area economies contracting 1 per cent in 2023. For mid-sized economies, including Australia, Canada and South Korea, there’s a risk of deeper-than-forecast recessions if interest rate hikes trigger housing busts, they said. Japan is forecast to have the mildest recession of the group owing to ongoing policy support and its delayed economic reopening, they added. China is an outlier as its economy recovering with the help of accommodative policies, though it remains at risk of renewed lockdowns as long as Beijing sticks to its zero-Covid strategy, they said. (With inputs from agencies) WATCH WION LIVE HERE

Major economies to enter recession in the next 12 months: Report

Amid recession fears in the US, IMF's managing director Kristalina Georgieva said the country is facing a "narrowing path to avoid a recession".

"The economy continues to recover from the pandemic and important shocks are buffeting the economy from the Russian invasion of Ukraine and from lockdowns in China," the IMF managing director said, adding, "Further negative shocks would inevitably make the situation more difficult."

<a href="https://www.wionews.com/world/us-recession-is-certainly-a-possibility-federal-reserve-chair-powell-490854">Also Read |&nbsp;US recession is 'certainly a possibility': Federal Reserve Chair Powell&nbsp;</a>

The IMF also slashed the US growth forecast to 2.9 per cent for 2022 and 1.7 per cent in 2023. The US has been battling the highest inflation in decades even as the Fed last week announced a historic increase in its benchmark lending rate.

Watch:&nbsp;US to have a gasoline tax holiday | Will US plunge into a recession?

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Georgieva said Trump-era tariffs should be lifted which President Biden had said he was considering removing.

"Especially at a time when inflation is high and supply chains are strained... we can see clear benefits in rolling back the tariffs that were introduced over the last 5 years," Georgieva said.

Meanwhile, US stocks ended strongly on Friday with Dow Jones Industrial Average surging 2.7 per cent to end at 31,500.68 and the Nasdaq Composite Index jumped 3.3 per cent to 11,607.62. The S&amp;P rose 3.1 per cent to 3,911.74.

(With inputs from Agencies)

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Amid recession fears in the US, IMF's managing director Kristalina Georgieva said the country is facing a "narrowing path to avoid a recession". "The economy continues to recover from the pandemic and important shocks are buffeting the economy from the Russian invasion of Ukraine and from lockdowns in China," the IMF managing director said, adding, "Further negative shocks would inevitably make the situation more difficult.

Amid recession fears in the US, IMF's managing director Kristalina Georgieva said the country is facing a "narrowing path to avoid a recession". "The economy continues to recover from the pandemic and important shocks are buffeting the economy from the Russian invasion of Ukraine and from lockdowns in China," the IMF managing director said, adding, "Further negative shocks would inevitably make the situation more difficult." Also Read | US recession is 'certainly a possibility': Federal Reserve Chair Powell The IMF also slashed the US growth forecast to 2.9 per cent for 2022 and 1.7 per cent in 2023. The US has been battling the highest inflation in decades even as the Fed last week announced a historic increase in its benchmark lending rate. Watch: US to have a gasoline tax holiday | Will US plunge into a recession? Georgieva said Trump-era tariffs should be lifted which President Biden had said he was considering removing. "Especially at a time when inflation is high and supply chains are strained... we can see clear benefits in rolling back the tariffs that were introduced over the last 5 years," Georgieva said. Meanwhile, US stocks ended strongly on Friday with Dow Jones Industrial Average surging 2.7 per cent to end at 31,500.68 and the Nasdaq Composite Index jumped 3.3 per cent to 11,607.62. The S&P rose 3.1 per cent to 3,911.74. (With inputs from Agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

US faces 'narrowing path' to avoid recession: IMF; growth forecast slashed

The head of the Federal Reserve, Jerome Powell, declared that a US recession is "definitely a possibility" and cautioned that preventing one would primarily depend on circumstances beyond the Federal Reserve's control. In his testimony to the Senate Banking Committee on Wednesday, the Fed chair acknowledged it was now harder for the central bank to control surging inflation while sustaining a robust job market.

Although he conceded that external variables like the conflict in the Ukraine and China's Covid-19 policy could further muddle the picture, he suggested that the US was sufficiently resilient to endure stricter monetary policy without entering a depression.

Also read |&nbsp;<a href="https://www.wionews.com/business-economy/day-after-fed-rate-hike-us-stocks-plunge-amid-recession-fears-488925">Day after Fed rate hike, US stocks plunge amid recession fears</a>

"We need to get inflation back down to 2 per cent," Powell told lawmakers. "We're using our tools to do that. And the public should believe that we will get inflation back down to 2 per cent&nbsp;over time."

"You know what's worse than high inflation and low unemployment?" Warren said. "It's high inflation and a recession with millions of people out of work. I hope you'll reconsider that, before you drive this economy off a cliff."&nbsp;

"It's certainly a possibility," Powell said. "It's not our intended outcome at all, but it's certainly a possibility."

Watch |&nbsp;US Fed chair Jerome Powell says recession a possibility

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"We're not trying to provoke — and don't think that we will need to provoke — a recession," he added. "But we do think it's absolutely essential that we restore price stability, really for the benefit of the labour market as much as anything else."&nbsp;

Despite acknowledging that the likelihood of an economic downturn is increased by the ongoing conflict in Ukraine and persistent supply-chain issues, Powell emphasised that the economy is well-positioned to handle higher interest rates.

Also read |&nbsp;<a href="https://www.wionews.com/world/treasury-secretary-janet-yellen-says-us-recession-not-inevitable-489750">Treasury Secretary Janet Yellen says US recession not 'inevitable'</a>

Forecasters are spotting storm clouds on the horizon more frequently now. The likelihood of a recession in the next 12 months is now 44 per cent, up from 28 per&nbsp;cent in April, according to economists surveyed by the Wall Street Journal.

Despite stating that it is famously difficult to foresee recessions, Powell said that he doesn't believe the risk is particularly significant. 
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The head of the Federal Reserve, Jerome Powell, declared that a US recession is "definitely a possibility" and cautioned that preventing one would primarily depend on circumstances beyond the Federal Reserve's control.

The head of the Federal Reserve, Jerome Powell, declared that a US recession is "definitely a possibility" and cautioned that preventing one would primarily depend on circumstances beyond the Federal Reserve's control. In his testimony to the Senate Banking Committee on Wednesday, the Fed chair acknowledged it was now harder for the central bank to control surging inflation while sustaining a robust job market. Although he conceded that external variables like the conflict in the Ukraine and China's Covid-19 policy could further muddle the picture, he suggested that the US was sufficiently resilient to endure stricter monetary policy without entering a depression. Also read | Day after Fed rate hike, US stocks plunge amid recession fears "We need to get inflation back down to 2 per cent," Powell told lawmakers. "We're using our tools to do that. And the public should believe that we will get inflation back down to 2 per cent over time." "You know what's worse than high inflation and low unemployment?" Warren said. "It's high inflation and a recession with millions of people out of work. I hope you'll reconsider that, before you drive this economy off a cliff." "It's certainly a possibility," Powell said. "It's not our intended outcome at all, but it's certainly a possibility." Watch | US Fed chair Jerome Powell says recession a possibility "We're not trying to provoke — and don't think that we will need to provoke — a recession," he added. "But we do think it's absolutely essential that we restore price stability, really for the benefit of the labour market as much as anything else." Despite acknowledging that the likelihood of an economic downturn is increased by the ongoing conflict in Ukraine and persistent supply-chain issues, Powell emphasised that the economy is well-positioned to handle higher interest rates. Also read | Treasury Secretary Janet Yellen says US recession not 'inevitable' Forecasters are spotting storm clouds on the horizon more frequently now. The likelihood of a recession in the next 12 months is now 44 per cent, up from 28 per cent in April, according to economists surveyed by the Wall Street Journal. Despite stating that it is famously difficult to foresee recessions, Powell said that he doesn't believe the risk is particularly significant. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

US recession is 'certainly a possibility': Federal Reserve Chair Powell 

Just days after the US Federal Reserve hiked interest rates, Treasury Secretary Janet Yellen said on Sunday (June 19) that recession in the United States is not "inevitable."

Raising fears of an economic contraction, Yellen conceded that "clearly inflation is unacceptably high."

Attributing it partly to the war in Ukraine, she said she did not believe that "a dropoff in consumer spending is the likely cause of a recession."

Predicting that the pace of inflation would slow in coming months, Yellen argued that the US labor market is "arguably the strongest of the postwar period."

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Soaring inflation and supply-chain snarls exacerbated by the war in Ukraine have increased pessimism after the US economy has recovered strongly from the damage wrought by Covid-19.&nbsp;

According to Yellen, President Joe Biden was reviewing some tariffs imposed on China by former President Donald Trump that made "no strategic sense."

After the US central bank on Wednesday raised the benchmark borrowing rate by 0.75 percentage points, Wall Street stocks tumbled.

With people beginning to hold off on vacation plans, economists see worrying signs that consumer confidence is weakening.

Adobe Analytics reported people are beginning to hold off on vacation plans domestic flight bookings were down 2.3 percent last month.

(With inputs from agencies)

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Just days after the US Federal Reserve hiked interest rates, Treasury Secretary Janet Yellen said on Sunday (June 19) that recession in the United States is not "inevitable.

Just days after the US Federal Reserve hiked interest rates, Treasury Secretary Janet Yellen said on Sunday (June 19) that recession in the United States is not "inevitable." Raising fears of an economic contraction, Yellen conceded that "clearly inflation is unacceptably high." Attributing it partly to the war in Ukraine, she said she did not believe that "a dropoff in consumer spending is the likely cause of a recession." Predicting that the pace of inflation would slow in coming months, Yellen argued that the US labor market is "arguably the strongest of the postwar period." × Soaring inflation and supply-chain snarls exacerbated by the war in Ukraine have increased pessimism after the US economy has recovered strongly from the damage wrought by Covid-19. According to Yellen, President Joe Biden was reviewing some tariffs imposed on China by former President Donald Trump that made "no strategic sense." After the US central bank on Wednesday raised the benchmark borrowing rate by 0.75 percentage points, Wall Street stocks tumbled. With people beginning to hold off on vacation plans, economists see worrying signs that consumer confidence is weakening. Adobe Analytics reported people are beginning to hold off on vacation plans domestic flight bookings were down 2.3 percent last month. (With inputs from agencies) Watch WION's live TV:

Treasury Secretary Janet Yellen says US recession not 'inevitable'

A day after the Federal Reserve hiked interest rates to a historic high, US stocks plunged as more central banks around the world hiked interest rates to curb inflation.

The Dow Jones Industrial Average sank over 741 points to end 2.4 points down at 29,927.07 closing below the 30k mark for the first time since January 2021.

<a href="https://www.wionews.com/business-economy/us-federal-reserve-announces-historic-interest-rate-hike-wall-street-stocks-surge-488585">Also Read:&nbsp;US Federal Reserve announces historic interest rate hike; Wall Street stocks surge</a>

The S&amp;P 500 also dived falling 3.3 per cent to close at 3,666.78 and Nasdaq fell &nbsp;4.1 per cent to 10,646.10. The US Federal Reserve on Thursday had announced 75 basis point rate hike which was the highest since 1994.

Watch:&nbsp;US Fed announces highest interest hike since 1994

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However, central banks in UK and Switzerland also hiked rates to curb rising inflation reigniting recession fears. The Swiss National Bank raised interest rates by 50 basis points for the first time in 15 years and the Bank of England raised rates for the&nbsp;fifth time since December by 25 basis points.

UK is currently battling the highest inflation in the last 40 years at nine per cent as the markets in the UK continued to be nervous with London's benchmark FTSE 100 index closing 3.1 per cent down.

The Bank of England indicated that the UK economy will contract &nbsp;0.3 per cent in the second quarter after showing growth in the first quarter.

(With inputs from Agencies)

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A day after the Federal Reserve hiked interest rates to a historic high, US stocks plunged as more central banks around the world hiked interest rates to curb inflation.

A day after the Federal Reserve hiked interest rates to a historic high, US stocks plunged as more central banks around the world hiked interest rates to curb inflation. The Dow Jones Industrial Average sank over 741 points to end 2.4 points down at 29,927.07 closing below the 30k mark for the first time since January 2021. Also Read: US Federal Reserve announces historic interest rate hike; Wall Street stocks surge The S&P 500 also dived falling 3.3 per cent to close at 3,666.78 and Nasdaq fell 4.1 per cent to 10,646.10. The US Federal Reserve on Thursday had announced 75 basis point rate hike which was the highest since 1994. Watch: US Fed announces highest interest hike since 1994 However, central banks in UK and Switzerland also hiked rates to curb rising inflation reigniting recession fears. The Swiss National Bank raised interest rates by 50 basis points for the first time in 15 years and the Bank of England raised rates for the fifth time since December by 25 basis points. UK is currently battling the highest inflation in the last 40 years at nine per cent as the markets in the UK continued to be nervous with London's benchmark FTSE 100 index closing 3.1 per cent down. The Bank of England indicated that the UK economy will contract 0.3 per cent in the second quarter after showing growth in the first quarter. (With inputs from Agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Day after Fed rate hike, US stocks plunge amid recession fears

Goldman Sachs Senior Chairman Lloyd Blankfein has asked companies and consumers to brace for an imminent recession in the US, saying it's a "very, very high risk."

"If I were running a big company, I would be very prepared for it," Blankfein said in an interview to CBS's "Face the Nation" on Sunday. "If I was a consumer, I'd be prepared for it."

Goldman Sachs is the second financial institution to forecast&nbsp;a recession for the US, which is battling inflation and high fuel prices.

US consumer sentiment had&nbsp;declined in early May to the lowest level since 2011, while&nbsp;the consumer prices spiked 8.3 per cent in April from a year ago, which is among the fastest in decades.

Earlier, Deutsche Bank had warned that the US is heading for a downturn caused by the Federal Reserve's aim to water down high inflation.

"We will get a major recession," Deutsche Bank economists wrote in a report to clients on Tuesday, CNN reported.

Watch |&nbsp;US Recession possibility 'very high risk factor', Goldman Sachs warns of growth forecast

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Blankfein remarks come after the firm’s economists cut the US growth forecasts for 2022 and 2023 to reflect the recent shake-out in financial markets, reports Bloomberg.

Goldman’s economic team expects US gross domestic product to expand 2.4 per cent this year, down from 2.6 per cent. It has also reduced its 2023 projections from 2.2 per cent to 1.6 per cent.

The report called this a “necessary growth slowdown” to help temper wage growth and reduce inflation back down towards the Fed’s 2 per cent target.

(With inputs from agencies)

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(With inputs from agencies)&nbsp;

Goldman Sachs Senior Chairman Lloyd Blankfein has asked companies and consumers to brace for an imminent recession in the US, saying it's a "very, very high risk.

Goldman Sachs Senior Chairman Lloyd Blankfein has asked companies and consumers to brace for an imminent recession in the US, saying it's a "very, very high risk." "If I were running a big company, I would be very prepared for it," Blankfein said in an interview to CBS's "Face the Nation" on Sunday. "If I was a consumer, I'd be prepared for it." Goldman Sachs is the second financial institution to forecast a recession for the US, which is battling inflation and high fuel prices. US consumer sentiment had declined in early May to the lowest level since 2011, while the consumer prices spiked 8.3 per cent in April from a year ago, which is among the fastest in decades. Earlier, Deutsche Bank had warned that the US is heading for a downturn caused by the Federal Reserve's aim to water down high inflation. "We will get a major recession," Deutsche Bank economists wrote in a report to clients on Tuesday, CNN reported. Watch | US Recession possibility 'very high risk factor', Goldman Sachs warns of growth forecast Blankfein remarks come after the firm’s economists cut the US growth forecasts for 2022 and 2023 to reflect the recent shake-out in financial markets, reports Bloomberg. Goldman’s economic team expects US gross domestic product to expand 2.4 per cent this year, down from 2.6 per cent. It has also reduced its 2023 projections from 2.2 per cent to 1.6 per cent. The report called this a “necessary growth slowdown” to help temper wage growth and reduce inflation back down towards the Fed’s 2 per cent target. (With inputs from agencies) WATCH WION LIVE HERE (With inputs from agencies)

Goldman Sachs predicts recession in US, calls it ‘very, very high risk’

More investors are watching the shares of discount retailers like Dollar General Corp and Dollar Tree Inc, which perform better during economic downturns, in the hopes of gauging changes in consumer behaviour, though higher tariffs may erode the companies' ability to act as economic bellwethers.

Fund managers and analysts say that they are looking for signs of a so-called "trade-down-trade", in which consumers forgo shopping at higher-end department stores or supermarkets in favour of the more limited selection but lower prices at deep discounters.&nbsp;

Between December 2008 and December 2011, for instance, shares of Dollar Tree soared nearly 200per cent as consumers pinched pennies during the Great Recession, while the benchmark S&amp;P 500 gained just 39per cent over the same time.

For the year to date, shares of Dollar Tree are up 7.3 per cent as it integrates its purchase of former competitor Family Dollar, while shares of Dollar General are up 28.4 per cent.&nbsp;

Both companies are scheduled to report earnings on Aug 29.

"The good news is consumers often shop more at the dollar stores during periods of economic weakness.&nbsp;We wouldn't expect a sharp increase in sales, but we suspect sales will remain stable at the dollar stores while other companies may feel greater pain," said Mark DeVaul, a portfolio manager at the Hennessy Equity and Income fund, who has a position in Dollar Tree.

"We believe the treasure hunt shopping atmosphere will continue to drive traffic and somewhat insulate them from competition from Amazon."

There are no indications that the United States is currently in a recession, though investors are becoming increasingly worried that the longest economic expansion in US history is nearing its end.

Earlier this month, Goldman Sachs said that the likelihood that the trade war between the US and China leads to a recession is increasing and that it no longer expects a trade deal between the world's two largest economies before the 2020 US presidential election.

Morgan Stanley, meanwhile, forecast that if the United States increases tariffs on all imports from China to 25 per cent for 4-6 months, and China takes countermeasures, a US recession would follow in three quarters.

The spread between the yields of shorter- and longer-duration Treasury bonds slipped below zero earlier this year, a so-called yield curve inversion which has presaged recessions in the past.&nbsp;

The yield of 30-year Treasuries hit record lows last week, a sign that investors are betting on slower economic growth and low inflation.

A trade-down trade in the face of economic weakness could also benefit deep discount retailers such as Five Below Inc, National Vision Holdings Inc, and Ollie's Bargain Outlet Holdings Inc that have solid balance sheets, noted Anthony Chukumba, managing director at Loop Capital Markets.&nbsp;

Higher-end retailers like Best Buy Co Inc, meanwhile, would likely underperform, he said.

"With the likelihood of a recession creeping up, we believe investors should start paying more attention to speciality hardlines retailers’ capital structures," he said.

Dollar General, in particular, may continue to outperform due to its strong management team and inventory control, said Charles Grom, an analyst at Gordon Haskett Research Advisors.

"This is one of our best ideas and we think there's an above-average chance that they will be raising their guidance" when the company reports its results and "mirror what Target did", he said.

Shares of Target Corp jumped over 19per cent and hit record highs after the company posted better-than-expected sales growth on Tuesday.

Yet deep discounters like Dollar Tree and Dollar General are not immune from the economic impacts of the trade war between the US and China.

Dollar Tree, for example, imports an estimated 60 per cent of its inventory from China and could be forced into raising prices if it is no longer able to get concessions from its vendors, said DeVaul, the Hennessy fund manager.

"They may have to 'break the buck' and raise prices, but the risk there is that by doing so they could piss off a lot of people and not get them back," he said.

More investors are watching the shares of discount retailers like Dollar General Corp and Dollar Tree Inc, which perform better during economic downturns, in the hopes of gauging changes in consumer behaviour, though higher tariffs may erode the companies' ability to act as economic bellwethers.

More investors are watching the shares of discount retailers like Dollar General Corp and Dollar Tree Inc, which perform better during economic downturns, in the hopes of gauging changes in consumer behaviour, though higher tariffs may erode the companies' ability to act as economic bellwethers. Fund managers and analysts say that they are looking for signs of a so-called "trade-down-trade", in which consumers forgo shopping at higher-end department stores or supermarkets in favour of the more limited selection but lower prices at deep discounters. Between December 2008 and December 2011, for instance, shares of Dollar Tree soared nearly 200per cent as consumers pinched pennies during the Great Recession, while the benchmark S&P 500 gained just 39per cent over the same time. For the year to date, shares of Dollar Tree are up 7.3 per cent as it integrates its purchase of former competitor Family Dollar, while shares of Dollar General are up 28.4 per cent. Both companies are scheduled to report earnings on Aug 29. "The good news is consumers often shop more at the dollar stores during periods of economic weakness. We wouldn't expect a sharp increase in sales, but we suspect sales will remain stable at the dollar stores while other companies may feel greater pain," said Mark DeVaul, a portfolio manager at the Hennessy Equity and Income fund, who has a position in Dollar Tree. "We believe the treasure hunt shopping atmosphere will continue to drive traffic and somewhat insulate them from competition from Amazon." There are no indications that the United States is currently in a recession, though investors are becoming increasingly worried that the longest economic expansion in US history is nearing its end. Earlier this month, Goldman Sachs said that the likelihood that the trade war between the US and China leads to a recession is increasing and that it no longer expects a trade deal between the world's two largest economies before the 2020 US presidential election. Morgan Stanley, meanwhile, forecast that if the United States increases tariffs on all imports from China to 25 per cent for 4-6 months, and China takes countermeasures, a US recession would follow in three quarters. The spread between the yields of shorter- and longer-duration Treasury bonds slipped below zero earlier this year, a so-called yield curve inversion which has presaged recessions in the past. The yield of 30-year Treasuries hit record lows last week, a sign that investors are betting on slower economic growth and low inflation. A trade-down trade in the face of economic weakness could also benefit deep discount retailers such as Five Below Inc, National Vision Holdings Inc, and Ollie's Bargain Outlet Holdings Inc that have solid balance sheets, noted Anthony Chukumba, managing director at Loop Capital Markets. Higher-end retailers like Best Buy Co Inc, meanwhile, would likely underperform, he said. "With the likelihood of a recession creeping up, we believe investors should start paying more attention to speciality hardlines retailers’ capital structures," he said. Dollar General, in particular, may continue to outperform due to its strong management team and inventory control, said Charles Grom, an analyst at Gordon Haskett Research Advisors. "This is one of our best ideas and we think there's an above-average chance that they will be raising their guidance" when the company reports its results and "mirror what Target did", he said. Shares of Target Corp jumped over 19per cent and hit record highs after the company posted better-than-expected sales growth on Tuesday. Yet deep discounters like Dollar Tree and Dollar General are not immune from the economic impacts of the trade war between the US and China. Dollar Tree, for example, imports an estimated 60 per cent of its inventory from China and could be forced into raising prices if it is no longer able to get concessions from its vendors, said DeVaul, the Hennessy fund manager. "They may have to 'break the buck' and raise prices, but the risk there is that by doing so they could piss off a lot of people and not get them back," he said.

Investors look at dollar stores as US recession fears increase

<a href="https://www.wionews.com/india-news/wreckage-of-missing-indian-air-force-an-32-aircraft-spotted-223911">Wreckage of missing Indian Air Force AN-32 aircraft spotted</a>

The wreckage of Indian Air Force's AN-32 aircraft has reportedly been found, sources reported. The aircraft took off from Assam's Jorhat airbase at 12:25 pm on Monday and went missing after 1 pm.

<a href="https://www.wionews.com/world/recession-could-hit-us-in-less-than-a-year-if-china-trade-war-worsens-survey-223893">Recession could hit US in less than a year if China trade war worsens: Survey</a>

The odds of a US recession by next year have increased sharply, with mounting protectionism continuing to pose the greatest economic threat, according to a business economic survey Monday.

<a href="https://www.wionews.com/india-news/mehul-choksi-fugitive-and-absconder-enforcement-directorate-tells-bombay-high-court-223892">Mehul Choksi 'fugitive and absconder', Enforcement Directorate tells Bombay High Court</a>

Diamantaire Mehul Choksi, accused in the multi-crore Punjab National Bank scam, is a "fugitive and absconder", the Enforcement Directorate told the Bombay High Court on Monday.

<a href="https://www.wionews.com/world/no-country-to-achieve-gender-equality-by-2030-global-report-2019-223874">No country to achieve gender equality by 2030: Global report 2019</a>

According to the Global reports 2019 released by Equal Measures 2030, no country in the world is set to achieve gender equality by 2030.

The Sustainable Development Goal (SDG) Gender Index which was released on Monday, assess the state of gender equality across 129 countries across the globe.

<a href="https://www.wionews.com/business-economy/stock-markets-close-at-record-high-sensex-surges-553-points-nifty-ends-above-12000-for-first-time-223868">Stock markets close at record high: Sensex surges 553 points, Nifty ends above 12,000 for first time</a>

The key Indian equity indices created new benchmarks on Monday with the Sensex hitting a record high level of 40,283.54 points.

The Nifty50 on the National Stock Exchange touched its fresh all-time high of 12,081.85 points.

Wreckage of missing Indian Air Force AN-32 aircraft spotted The wreckage of Indian Air Force's AN-32 aircraft has reportedly been found, sources reported. The aircraft took off from Assam's Jorhat airbase at 12:25 pm on Monday and went missing after 1 pm.

Wreckage of missing Indian Air Force AN-32 aircraft spotted The wreckage of Indian Air Force's AN-32 aircraft has reportedly been found, sources reported. The aircraft took off from Assam's Jorhat airbase at 12:25 pm on Monday and went missing after 1 pm. Recession could hit US in less than a year if China trade war worsens: Survey The odds of a US recession by next year have increased sharply, with mounting protectionism continuing to pose the greatest economic threat, according to a business economic survey Monday. Mehul Choksi 'fugitive and absconder', Enforcement Directorate tells Bombay High Court Diamantaire Mehul Choksi, accused in the multi-crore Punjab National Bank scam, is a "fugitive and absconder", the Enforcement Directorate told the Bombay High Court on Monday. No country to achieve gender equality by 2030: Global report 2019 According to the Global reports 2019 released by Equal Measures 2030, no country in the world is set to achieve gender equality by 2030. The Sustainable Development Goal (SDG) Gender Index which was released on Monday, assess the state of gender equality across 129 countries across the globe. Stock markets close at record high: Sensex surges 553 points, Nifty ends above 12,000 for first time The key Indian equity indices created new benchmarks on Monday with the Sensex hitting a record high level of 40,283.54 points. The Nifty50 on the National Stock Exchange touched its fresh all-time high of 12,081.85 points.

News brief: Big stories of the day

Over the last month the US-China trade war has boosted the risk of a US recession, say a strong majority of economists polled by Reuters, who now put the chances of that happening in the next two years at 40%.

That is up from a median 35% in last month's poll, the first time it had dipped slightly from where it held since December last year, before a crushing sell-off on Wall Street as 2018 came to a close, in part because of those worries.

US President Donald Trump has dismissed the ongoing trade war with China as a "little squabble," but there are clear signs of the conflict already having an impact on the economy, and the stock market has become jittery again.

"I have a hard time thinking of a scenario in which a further escalation of the trade tension we currently have would not make recession risk higher," said Michael Hanson, head of global macro strategy at TD Securities.

"We are already in a situation where the level of tariffs that are either imposed or threatened to be imposed over the next several weeks are really quite high ... and a move to basically putting tariffs of 25% on everything we import from China is a very real drag in the economy," said Hanson.

While only a single-digit percentage of respondents say a US&nbsp;recession is likely in the coming year, more than one-quarter of economists polled see a greater than 50% probability of recession within two years.

The most pessimistic call for the probability of a recession in one year also has crept up, from 60% to 70%.

The US&nbsp;economy is forecast to have already lost considerable momentum, slowing to 2.0% in the current quarter from 3.2% in the first three months of the year, according to median forecasts from the latest monthly poll of 120 economists.

That forecast for April-June is a sharp downgrade from 2.5% in last month's poll, owing in part to the unexpectedly strong figure reported for January-March. Growth is forecast to slow to 1.8%, below trend, by the fourth quarter of 2020.

The impact of the trade war is already being felt on the economy, with retail giants like Walmart Inc warning shoppers that prices will rise due to higher tariffs on Chinese imports.

Nearly 75% of economists or 52 of 70, who answered an additional question on what the US-China trade war developments this month had done to the risks of a US&nbsp;recession said they had increased.

China is trying to steer its economy away from exporting cheap goods and more toward domestic consumption. But the United States, already a very consumer-reliant economy, imports hundreds of billions of dollars worth of goods from China, which the Trump administration is hitting with tariffs.

Very few economists believe this will do anything but damage the economy.

"There actually seems to be a belief in the White House that trade wars are both good and winnable. Delusion creates massive risks," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

With trade uncertainty abounding and increased chances of recession, the Federal Reserve is expected to hold rates at their current 2.25-2.50% until the end of next year at least.

But over half of the smaller set of economists who answered another additional question said the Fed is likely to cut rates before end-2020. Among those respondents, more than 80 per cent expect a rate cut to be the central bank's next policy move.

Although Fed officials had previously played down the trade war's likely impact on the U.S. economy, they emphasized on Monday a protracted tit-for-tat battle was a different matter that might require a Fed response.

While interest rate futures are pricing in a cut as soon as October, the Reuters poll results are the latest evidence to suggest that the global policy rate cycle following the Great Recession over a decade ago is over.

Underlining a weak demand outlook, forecasts for core PCE, the Fed's preferred inflation gauge, were cut to average 1.7% from 1.9% this year and to 2.0% from 2.1% in 2020.

"If we have a recession, it will likely be caused by the Fed. We're in a chronic disinflationary environment, caused by the supply side of the equation, not the demand side," said Gary Cloud, co-chief investment officer for fixed income at FCI Advisors.

Over the last month the US-China trade war has boosted the risk of a US recession, say a strong majority of economists polled by Reuters, who now put the chances of that happening in the next two years at 40%.

Over the last month the US-China trade war has boosted the risk of a US recession, say a strong majority of economists polled by Reuters, who now put the chances of that happening in the next two years at 40%. That is up from a median 35% in last month's poll, the first time it had dipped slightly from where it held since December last year, before a crushing sell-off on Wall Street as 2018 came to a close, in part because of those worries. US President Donald Trump has dismissed the ongoing trade war with China as a "little squabble," but there are clear signs of the conflict already having an impact on the economy, and the stock market has become jittery again. "I have a hard time thinking of a scenario in which a further escalation of the trade tension we currently have would not make recession risk higher," said Michael Hanson, head of global macro strategy at TD Securities. "We are already in a situation where the level of tariffs that are either imposed or threatened to be imposed over the next several weeks are really quite high ... and a move to basically putting tariffs of 25% on everything we import from China is a very real drag in the economy," said Hanson. While only a single-digit percentage of respondents say a US recession is likely in the coming year, more than one-quarter of economists polled see a greater than 50% probability of recession within two years. The most pessimistic call for the probability of a recession in one year also has crept up, from 60% to 70%. The US economy is forecast to have already lost considerable momentum, slowing to 2.0% in the current quarter from 3.2% in the first three months of the year, according to median forecasts from the latest monthly poll of 120 economists. That forecast for April-June is a sharp downgrade from 2.5% in last month's poll, owing in part to the unexpectedly strong figure reported for January-March. Growth is forecast to slow to 1.8%, below trend, by the fourth quarter of 2020. The impact of the trade war is already being felt on the economy, with retail giants like Walmart Inc warning shoppers that prices will rise due to higher tariffs on Chinese imports. Nearly 75% of economists or 52 of 70, who answered an additional question on what the US-China trade war developments this month had done to the risks of a US recession said they had increased. China is trying to steer its economy away from exporting cheap goods and more toward domestic consumption. But the United States, already a very consumer-reliant economy, imports hundreds of billions of dollars worth of goods from China, which the Trump administration is hitting with tariffs. Very few economists believe this will do anything but damage the economy. "There actually seems to be a belief in the White House that trade wars are both good and winnable. Delusion creates massive risks," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. With trade uncertainty abounding and increased chances of recession, the Federal Reserve is expected to hold rates at their current 2.25-2.50% until the end of next year at least. But over half of the smaller set of economists who answered another additional question said the Fed is likely to cut rates before end-2020. Among those respondents, more than 80 per cent expect a rate cut to be the central bank's next policy move. Although Fed officials had previously played down the trade war's likely impact on the U.S. economy, they emphasized on Monday a protracted tit-for-tat battle was a different matter that might require a Fed response. While interest rate futures are pricing in a cut as soon as October, the Reuters poll results are the latest evidence to suggest that the global policy rate cycle following the Great Recession over a decade ago is over. Underlining a weak demand outlook, forecasts for core PCE, the Fed's preferred inflation gauge, were cut to average 1.7% from 1.9% this year and to 2.0% from 2.1% in 2020. "If we have a recession, it will likely be caused by the Fed. We're in a chronic disinflationary environment, caused by the supply side of the equation, not the demand side," said Gary Cloud, co-chief investment officer for fixed income at FCI Advisors.

US recession risk rises as US-China trade tensions heat up: Report

As the gap between short- and long-term borrowing costs hovers near its lowest in more than 10 years, speculation has risen over whether the so-called yield curve is signalling that a recession could be around the corner. Not to worry, two influential Federal Reserve policymakers said on Friday.&nbsp;

Another, whose views are typically outside the mainstream at the Fed, disagreed. Growth prospects look pretty strong, which is why the Fed is raising short-term interest rates, the two sanguine policymakers explained. Those rate hikes, they said, are in and of themselves acting to flatten the yield curve.

In addition, they argued, the curve will likely steepen as the US government runs a bigger deficit and issues more debt, they said.&nbsp;

<img alt="recession.png" data-entity-type="" data-entity-uuid="" height="493" src="http://images.wionews.com/iniline-images/recession.png" width="752" />

The calming comments, from the New York Fed’s incoming chief John Williams and from Chicago Fed President Charles Evans in back-to-back but separate appearances, appeared calculated to allay concern about a potential slowdown ahead.

“The yield curve is not nearly as much of a concern as I might have pointed to a couple months ago,” Evans said in Chicago after a speech, in response to a reporter’s question.

Williams, who will leave his current job as San Francisco Fed president in June to take over at the New York Fed, also said he expects the Fed’s shrinking balance sheet will help steepen the curve by putting upward pressure on longer-term rates. In January the U.S. Congress passed a budget deal that boosts U.S. government spending, following a December tax package that slashes corporate tax rates. Both changes are expected to lead to an increase in government borrowing in coming years.

The Fed policymakers reason that a bigger supply of debt should put downward pressure on Treasury prices and deliver a corresponding lift to yields. “We’ve got more fiscal debt in train in the U.S. That has to be funded,” and will likely push up long rates and steepen the yield curve, Evans said. At their March meeting, Fed officials “generally agreed that the current degree of flatness of the yield curve was not unusual by historical standards,” according to the meeting minutes.

Since then, longer rates have come closer to being overtaken by short rates, a phenomenon is known as yield curve inversion, which has been a reliable precursor of past recessions. Still, there is the debate within the Fed over whether a flat yield curve is a problem. &nbsp;Dallas Fed President Robert Kaplan earlier this week said that while the Fed has the flexibility to raise rates now, the 10-year yield imposes limits on how far it can do so. The 10-year yield on Friday was at 2.96 percent, the highest in more than four years.

Minneapolis Fed President Neel Kashkari, who consistently voted against rate hikes last year, said in a CNBC interview on Friday that the flattening curve was “a yellow light flashing,” a warning that the Fed should soon stop raising rates or risk breaking the economy too quickly and plunging the country into recession. Evans, who joined Kashkari in dissenting last December but who earlier this month has sounded more supportive of gradual rate hikes as the economy strengthens, isn’t buying it.

“Any concerns that we may have expressed before about an overly flat yield curve, I’d put off to the side until we see things play out.”

<img alt="Federal policy vs the yield curve_0.png" data-entity-type="" data-entity-uuid="" height="493" src="http://images.wionews.com/iniline-images/Federal%20policy%20vs%20the%20yield%20curve_0.png" width="757" />

The Federal policymakers reason that a bigger supply of debt should put downward pressure on Treasury prices and deliver a corresponding lift to yields.

As the gap between short- and long-term borrowing costs hovers near its lowest in more than 10 years, speculation has risen over whether the so-called yield curve is signalling that a recession could be around the corner. Not to worry, two influential Federal Reserve policymakers said on Friday. Another, whose views are typically outside the mainstream at the Fed, disagreed. Growth prospects look pretty strong, which is why the Fed is raising short-term interest rates, the two sanguine policymakers explained. Those rate hikes, they said, are in and of themselves acting to flatten the yield curve. In addition, they argued, the curve will likely steepen as the US government runs a bigger deficit and issues more debt, they said. The calming comments, from the New York Fed’s incoming chief John Williams and from Chicago Fed President Charles Evans in back-to-back but separate appearances, appeared calculated to allay concern about a potential slowdown ahead. “The yield curve is not nearly as much of a concern as I might have pointed to a couple months ago,” Evans said in Chicago after a speech, in response to a reporter’s question. Williams, who will leave his current job as San Francisco Fed president in June to take over at the New York Fed, also said he expects the Fed’s shrinking balance sheet will help steepen the curve by putting upward pressure on longer-term rates. In January the U.S. Congress passed a budget deal that boosts U.S. government spending, following a December tax package that slashes corporate tax rates. Both changes are expected to lead to an increase in government borrowing in coming years. The Fed policymakers reason that a bigger supply of debt should put downward pressure on Treasury prices and deliver a corresponding lift to yields. “We’ve got more fiscal debt in train in the U.S. That has to be funded,” and will likely push up long rates and steepen the yield curve, Evans said. At their March meeting, Fed officials “generally agreed that the current degree of flatness of the yield curve was not unusual by historical standards,” according to the meeting minutes. Since then, longer rates have come closer to being overtaken by short rates, a phenomenon is known as yield curve inversion, which has been a reliable precursor of past recessions. Still, there is the debate within the Fed over whether a flat yield curve is a problem. Dallas Fed President Robert Kaplan earlier this week said that while the Fed has the flexibility to raise rates now, the 10-year yield imposes limits on how far it can do so. The 10-year yield on Friday was at 2.96 percent, the highest in more than four years. Minneapolis Fed President Neel Kashkari, who consistently voted against rate hikes last year, said in a CNBC interview on Friday that the flattening curve was “a yellow light flashing,” a warning that the Fed should soon stop raising rates or risk breaking the economy too quickly and plunging the country into recession. Evans, who joined Kashkari in dissenting last December but who earlier this month has sounded more supportive of gradual rate hikes as the economy strengthens, isn’t buying it. “Any concerns that we may have expressed before about an overly flat yield curve, I’d put off to the side until we see things play out.”

US recession ahead? Federal policymakers say not to worry

The US economy may be basking in the warm glow of solid growth, but economists are nervously eyeing a trend in the bond market that could spell stormy weather ahead.&nbsp;Even though President Donald Trump is touting unemployment at its lowest level in 17 years and Wall Street soaring to new heights, economists are worried about one indicator that is often a harbinger of recession: the yield curve.

&quot;Since 1950, each recession has been preceded by a reversal of the yield curve&quot;, said Christopher Low, chief economist of FTN Financial.&nbsp;This closely scrutinized graph maps the difference in yield, or return on investment, of short- and long-term US Treasury debt, usually comparing two-year notes to 10-year bonds.&nbsp;

Normally, the shorter the investment, the lower the yield, and conversely, the longer the investment, the higher the return, to offset the greater risks of losing access to funds for an extended period.&nbsp;But for the past year, the yield curve has been flattening as the return on short-term debt has been getting close to long-term yields, possible signaling eroding confidence in the economy&#39;s performance in the coming years.&nbsp;

The spread between the yield on two- and 10-year Treasury paper fell from 135 in December 2016 to 51 basis points on December 15, the lowest since October 2007 -- just before the start of the global financial crisis.&nbsp;Worse still would be if the yield curve inverts, as short-term returns outpace the longer-dated debt -- meaning the spread is negative -- and if officials ignore the warning. The yield curve inversion &quot;could be heralding a contraction of the economy,&quot; says Gary Duncan, chief economist at Oxford Economics.

Fed policy&nbsp;

As Gregori Volokhine, of Meeschaert Financial Services, explained: &quot;An inversion of the curve indicates that investors do not have confidence in the future&quot;.&nbsp;The main factor behind the flattening of the yield curve is the US central bank&#39;s moves to raise the benchmark interest rate five times since the end of 2015, including three increases this year and three more expected in 2018.

The long-term yields fluctuate more in line with growth and inflation expectations. And while growth prospects have been revised upwards for next year -- in part due to the impact of the massive corporate tax cuts just approved by Congress -- the Federal Reserve&#39;s inflation target will not be reached until 2019, according to its latest forecasts.&nbsp;

The Fed&#39;s preferred inflation measure was only 1.6 percent year-on-year in October.&nbsp;Two voting members of the Fed&#39;s policy committee -- including Minneapolis Fed President Neel Kashkari -- dissented from the December 13 decision to raise rates, preferring to wait for inflation to rise further.

&#39;Worrying&#39;

Kashkari also mentioned his concerns about the yield curve and the signal it is sending to policymakers.&nbsp;&quot;While the yield curve has not yet inverted, the bond market is telling us that the odds of a recession are increasing,&quot; he said in a statement explaining his opposition to raising rates again.

Duncan of Oxford Economics cautioned that &quot;if the Fed tightens its policy too quickly, the markets anticipate a slowdown in the economy in the longer term&quot; as credit becomes more expensive.&nbsp;However, outgoing Fed Chair Janet Yellen downplayed those fears.

&quot;There are good reasons to think that the relationship between the slope of the yield curve and the business cycle may have changed,&quot; Yellen said in her press conference last week.&nbsp;FTN&#39;s Low said Yellen could be making the same mistake as her predecessors Alan Greenspan in 1998 and Ben Bernanke in 2006, who each saw recessions after the yield curve inverted.&nbsp;

&quot;Janet Yellen is making the same speech,&quot; Low said. &quot;This is worrying&quot;. Like most analysts, Low does not anticipate an inversion before 2019, or a recession until &quot;early 2020&quot;.&nbsp;Historically the economy has seen four to six quarters between a curve inversion and the start a recession.

Of course, not every flat curve brings on an economic downturn, and some economists agree with Yellen that it may be too early to panic.&nbsp;Noted economist Mohamed El-Erian, the chief economic adviser at Allianz SE, the parent company of PIMCO, notes several reasons the yield curve could steepen, including many indicators signaling the economy still has room to expand and inflation to pick up.

If it doesn&#39;t, the Fed could reverse course quickly, he wrote in a blog post.&nbsp;In addition, &quot;the synchronized pick-up in growth in the rest of the world is supportive of the US expansion&quot;.

Economists are worried about one indicator that is often a harbinger of recession: the yield curve

The US economy may be basking in the warm glow of solid growth, but economists are nervously eyeing a trend in the bond market that could spell stormy weather ahead. Even though President Donald Trump is touting unemployment at its lowest level in 17 years and Wall Street soaring to new heights, economists are worried about one indicator that is often a harbinger of recession: the yield curve. "Since 1950, each recession has been preceded by a reversal of the yield curve", said Christopher Low, chief economist of FTN Financial. This closely scrutinized graph maps the difference in yield, or return on investment, of short- and long-term US Treasury debt, usually comparing two-year notes to 10-year bonds. Normally, the shorter the investment, the lower the yield, and conversely, the longer the investment, the higher the return, to offset the greater risks of losing access to funds for an extended period. But for the past year, the yield curve has been flattening as the return on short-term debt has been getting close to long-term yields, possible signaling eroding confidence in the economy's performance in the coming years. The spread between the yield on two- and 10-year Treasury paper fell from 135 in December 2016 to 51 basis points on December 15, the lowest since October 2007 -- just before the start of the global financial crisis. Worse still would be if the yield curve inverts, as short-term returns outpace the longer-dated debt -- meaning the spread is negative -- and if officials ignore the warning. The yield curve inversion "could be heralding a contraction of the economy," says Gary Duncan, chief economist at Oxford Economics. Fed policy As Gregori Volokhine, of Meeschaert Financial Services, explained: "An inversion of the curve indicates that investors do not have confidence in the future". The main factor behind the flattening of the yield curve is the US central bank's moves to raise the benchmark interest rate five times since the end of 2015, including three increases this year and three more expected in 2018. The long-term yields fluctuate more in line with growth and inflation expectations. And while growth prospects have been revised upwards for next year -- in part due to the impact of the massive corporate tax cuts just approved by Congress -- the Federal Reserve's inflation target will not be reached until 2019, according to its latest forecasts. The Fed's preferred inflation measure was only 1.6 percent year-on-year in October. Two voting members of the Fed's policy committee -- including Minneapolis Fed President Neel Kashkari -- dissented from the December 13 decision to raise rates, preferring to wait for inflation to rise further. 'Worrying' Kashkari also mentioned his concerns about the yield curve and the signal it is sending to policymakers. "While the yield curve has not yet inverted, the bond market is telling us that the odds of a recession are increasing," he said in a statement explaining his opposition to raising rates again. Duncan of Oxford Economics cautioned that "if the Fed tightens its policy too quickly, the markets anticipate a slowdown in the economy in the longer term" as credit becomes more expensive. However, outgoing Fed Chair Janet Yellen downplayed those fears. "There are good reasons to think that the relationship between the slope of the yield curve and the business cycle may have changed," Yellen said in her press conference last week. FTN's Low said Yellen could be making the same mistake as her predecessors Alan Greenspan in 1998 and Ben Bernanke in 2006, who each saw recessions after the yield curve inverted. "Janet Yellen is making the same speech," Low said. "This is worrying". Like most analysts, Low does not anticipate an inversion before 2019, or a recession until "early 2020". Historically the economy has seen four to six quarters between a curve inversion and the start a recession. Of course, not every flat curve brings on an economic downturn, and some economists agree with Yellen that it may be too early to panic. Noted economist Mohamed El-Erian, the chief economic adviser at Allianz SE, the parent company of PIMCO, notes several reasons the yield curve could steepen, including many indicators signaling the economy still has room to expand and inflation to pick up. If it doesn't, the Fed could reverse course quickly, he wrote in a blog post. In addition, "the synchronized pick-up in growth in the rest of the world is supportive of the US expansion".

Could the 'curve' be warning of a US recession?

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