One of the world’s largest insurers, Allianz, has predicted a hard landing for the U.S. economy. “We expect the economic momentum to slow down during the second half of the year due to increasingly tight credit conditions,” said the insurer’s analysts.
Allianz Expects US Economy to Take a Nosedive
Allianz, one of the world’s leading insurers, published an analysis last week warning that the U.S. economy is headed for a “hard landing.” Allianz, headquartered in Munich, Germany, is one of the world’s largest insurers with over 122 million private and corporate customers worldwide, and more than 159,000 employees.
“We anticipate the economic momentum to deteriorate during the latter part of the year as a result of rapidly tightening credit conditions, which have been exacerbated by the recent banking crisis,” stated the Allianz analysts. “Negative confidence effects from the near-death experience in the U.S. banking sector and the unresolved energy situation in Europe will shape the rest of the year.”
We project a sizeable recession in the U.S. (‘hard landing’) at the end of the year due to increasingly entrenched negative confidence effects.
Several major banks in the U.S. have already failed, including Silicon Valley Bank and Signature Bank. The Federal Reserve and the Treasury took steps to prevent a systemic crisis, including providing liquidity to the banking system, creating a new lending facility to provide short-term loans to banks, and insuring all deposits of both banks.
In addition to Allianz’s warning, several other people have similarly predicted a crash landing for the U.S. economy. Prominent economist David Rosenberg forecasted a recession and a crash landing in March based on data from the Federal Reserve Bank of Philadelphia. Rich Dad Poor Dad author Robert Kiyosaki also warned of a hard landing as federal bailouts followed the banking crisis. Meanwhile, billionaire Barry Sternlicht anticipates a nosedive for the U.S. economy.
What do you think about the prediction by Allianz about a hard landing? Let us know in the comments section below.
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