Grantham has also expressed concern about the long-term impact of the Fed's rapid tightening campaign, which has seen borrowing costs rise from near-zero to over 5.5% in just 18 months. He criticized the central bank's track record, stating that it has never accurately predicted a recession, especially those following major bubbles. Despite positive economic indicators in 2023, Grantham remains wary of a potential economic slump.
Key takeaways:
- Legendary investor Jeremy Grantham believes that the rise of AI won't prevent a recession, which he predicts could hit the US economy by December.
- Grantham warns that the Federal Reserve's aggressive interest-rate hiking cycle will crush growth and drag down stock prices.
- Despite good economic news in 2023, Grantham remains concerned about the longer-term impact of the Fed's rapid tightening campaign, which has lifted borrowing costs from near-zero to over 5.5% in just 18 months.
- Grantham criticizes the Federal Reserve's track record, stating that it has never accurately predicted a recession, especially those following major economic bubbles.