The outbreak of the coronavirus disease (COVID-19) pandemic in 2020 triggered profound economic changes not seen in decades. Unemployment has skyrocketed, inflation has skyrocketed, and housing costs have reached new heights. Here he fast forwards to 2024. Previous concerns about a flare-up seem to be waning, which reassures experts like Citadel CEO Ken Griffin.
RELATED: This Social Security spousal rule officially ends in 2024, but these 3 strategies will remain
Read: How to get $340 in cash back a year – on things you already buy.
In fact, Griffin recently explained to CNBC that the economy is strong and that a soft landing (part of a normal economic cycle in which economic growth slows and avoids a recession) could occur this year. Recent economic indicators show healthy GDP growth, inflation easing at a better-than-expected pace, and a robust labor market. Inflation could reach a low of around 2% by the end of 2024.
” [Federal Reserve] Interest rate cuts could begin this summer, and the unemployment rate should recover a bit. But the overall economy is looking very good right now,” Griffin said excitedly.
However, several risks could jeopardize a soft landing for the economy, he advised. Here are some things to keep in mind:
sponsor: Do you owe the IRS more than $10,000? Schedule a free consultation to see if you qualify for tax relief.
1. Unchecked government spending
As Griffin points out, current levels of increased government spending have resulted in a “good” economy for now, but could come at a cost down the road. He suggested that government spending needs to be checked to ensure that the U.S. economy does not suffer a fiscal “hangover” as a result of unnecessary government spending.
2. Tensions between Taiwan and China
Griffin also expressed concern about the current escalation of tensions between China and Taiwan. He argued that because Taiwan's semiconductors are so important to many American companies, it is in the country's best interest to protect Taiwan's economic security. He predicts that US GDP could take a massive (8% to 10%) hit if it loses access to these Taiwanese semiconductors.
Learn: Student loan forgiveness “buyback” programs could provide additional relief to borrowers — are you eligible?
As Mr. Griffin explained, the U.S. economy is currently on the upswing, but it is important to consider these risks when predicting what will happen next. If any of these risks are triggered, a subsequent recession cannot be ruled out.
GOBankingRates Details
This article originally appeared on GOBankingRates.com: Investment experts call economy 'pretty good right now' but warn of two risks
