I raised an eyebrow as I came across an article on The Edge Singapore titled, "Deutsche Bank predicts US recession in 2023 as Fed boosts rates" [link].
Deutsche Bank economists are certainly bold to stake their reputation on the line in calling for a 2023 recession in the United States. So far, none of the other Tier-1 banks have made this prediction.
Their view is that the extra U.S. Fed tightening by late 2023 and early 2024 will cause the U.S. economy to suffer a major blow.
In short, Deutsche Bank feels that the Fed will slam the brakes too hard in a bid to counter inflation.
What does this mean for a small-time Singaporean investor like me?
Well, the U.S. is Singapore's third largest trading partner, according to SingStat [link]. Any downturn in the U.S. economy and reduced consumer demand is likely to make a dent in the export-oriented industries on our shores.
However, our BIGGEST trading partner is Mainland China. If the Chinese economy continues to grow at a decent clip - as hoped by the Chinese government - then the negative impact may be limited.
All in all, uncertainty and volatility will be a key theme over the next two years. Might be good to stash some cash aside, in case buying opportunities appear in the market.
Deutsche Bank economists are certainly bold to stake their reputation on the line in calling for a 2023 recession in the United States. So far, none of the other Tier-1 banks have made this prediction.
Their view is that the extra U.S. Fed tightening by late 2023 and early 2024 will cause the U.S. economy to suffer a major blow.
In short, Deutsche Bank feels that the Fed will slam the brakes too hard in a bid to counter inflation.
What does this mean for a small-time Singaporean investor like me?
Well, the U.S. is Singapore's third largest trading partner, according to SingStat [link]. Any downturn in the U.S. economy and reduced consumer demand is likely to make a dent in the export-oriented industries on our shores.
However, our BIGGEST trading partner is Mainland China. If the Chinese economy continues to grow at a decent clip - as hoped by the Chinese government - then the negative impact may be limited.
All in all, uncertainty and volatility will be a key theme over the next two years. Might be good to stash some cash aside, in case buying opportunities appear in the market.
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