Brace For Stagflation After Fed's Benevolence, Warns Analyst, Raising 5 Corporate Red Flags: 'Inflation Is Transitory Mistake All Over Again'
BY Benzinga | ECONOMIC | 09/20/24 07:57 AM EDTThe Federal Reserve announced Wednesday a deep 50 basis-point cut to its Fed funds rate, which is likely to ease the pressure on consumers. An analyst, however, sees a return of recession along with stagnation.
What Happened: “Get ready for stagnation,” said GLJ Research’s Gordon Johnson, adding that, this is the “inflation is Transitory” mistake all over again. To make his case, he noted four corporate announcements suggesting the near could be challenging.
China Drags Skechers: Skechers U.S.A., Inc. , which designs, manufactures and distributes footwear, sees softness in China’s business. CFO John Vandemore said, at the Wells Fargo Consumer Conference, “We've definitely seen worse conditions unfold in China than we expected for the back half of the year, so I would expect the back of the year's going to be more disappointing than what we had originally thought.” The shares reacted with a sharp tumble on Thursday, settling down 9.62% to $61.56
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R-Word Still Floats Around: Chief Global Strategist of BCA Research?Peter Berezin?said in an X post that the 50 basis-point cut and another 50 bps reduction the central bank is penciling in before the year-end may not ensure a soft landing. He pointed out to the previous two rate-cut cycles when recession followed following 100 basis-point cuts.
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