Expert warns of high risk of economic breaking point in next 3 months despite recent resilience
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Veteran market watcher Komal Sri-Kumar sees high risk of something "breaking" in the economy in the next 3 months due to fragility after 20 months of rate hikes.
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Sri-Kumar is concerned about issues in commercial real estate market and "troubled loans" at banks with $550 billion in unrealized losses.
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The economy has shown resilience so far in 2023, with stocks rebounding, strong GDP growth, and falling inflation. Some see a "soft landing" as most likely.
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Goldman Sachs' chief economist Jan Hatzius sees just 15% odds of a recession, arguing we've gotten through the worst without one so far.
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Hatzius believes the Philips curve linking inflation and unemployment doesn't hold, though some disagree and see a recession as needed to tame inflation.