- David Rubenstein told Fox Business News he isn’t expecting a recession in the next few quarters.
- The billionaire investor said he expects the Fed to start cutting rates in 2024’s second quarter.
- The Fed has signaled three interest rate cuts for 2024 even though inflation is above its 2% target.
Billionaire investor David Rubenstein isn’t expecting a US recession in the next few quarters, he told Fox Business Network last week.
Rubenstein, a co-founder of investment giant Carlyle Group, told the network that US economy seems to be “doing pretty well,” so it’s unlikely for a recession to hit in the next few quarters.
“We have recessions every seven years, so at some point, there will be a recession. But it doesn’t seem like one is imminent in the next couple of quarters or so,” he added.
The Fed last Wednesday signaled three interest rate cuts for 2024 even though inflation is running above its 2% target. The central bank has held rates steady since July after hiking them 11 times since March last year to dampen inflation and cool a red-hot US economy.
However, there have been concerns the Fed’s rate increases could tip the US into a downturn.
The Fed typically cuts rates in anticipation of a recession, as lower borrowing costs stimulate demand, so there are now expectations that the US could be slowing soon.
However, rate hikes next year may not be the signal for recession that it was once, Business Insider’s Matthew Fox wrote last week following the Fed’s rate decision.
Rubenstein predicts the Fed is likely to start cutting rates in the second quarter of next year after it’s sure it has gotten inflation under control. In November, the Consumer Price Inflation rose 3.1% year-over-year. While this was still under the Fed’s 2% target, it was significantly below the 40-year high of 9.1% in June last year.
The Fed also likely wants to avoid cutting rates too close to the US presidential election in November.
“Clearly, if you have rate cuts in the third quarter, it will be seen as something to help the Democrats. And I suspect that criticism is one the Fed would like to avoid,” he explained on Fox.
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