Three quarters (75 per cent) of ultra-high net worth investors (UHNWIs) believe the US could begin its next recession within two years, according to JP Morgan Private Bank’s Spring Investment Barometer.
Of those who are expecting an economic downturn in the US, a fifth (21 per cent) of respondents believe this will begin in 2019 and half (50 per cent) expect the next recession could start in 2020.
When exploring the potential for US interest rate hikes, almost half of investors (47 per cent) expect to see an additional rate rise from the US Federal Reserve this year, following Jerome Powell’s first hike in March 2018. Of the ultra-high net worth individuals interviewed, two fifths (41 per cent) believe policymakers will increase interest rates another two times or more.
Anthony Collard, Head of Investments for the UK & Nordics, says: “Whilst there is clearly some concern about the US amongst ultra-high net worth investors across the globe, with almost three quarters believing the region could suffer an economic downturn in the next 24 months, we do not see signs of the US economy being close to a recession. Until we see clear imbalances building, and policy approaching a point where it really constrains economic activity, we lean towards a view that the cycle will continue to expand.
“Following the first US rate hike in March, we expect the Federal Reserve to raise its policy rate significantly this year. This is due to economic growth being strong, low unemployment and fairly loose financial conditions. We entered the year thinking that three 25 basis point hikes would occur in 2018, but four hikes could be possible under the right conditions.”