March 4, 2024

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Kathy Wood: 'America is already in recession'

Kathy Wood: ‘America is already in recession’

In an interview with CNBC, Kathy Wood, CEO of Mediagenic Ark, warned that the United States was already in a recession. He also acknowledges that underestimating the resilience of inflation.

Then Tesla boss Elon Musk Wood also warns that the United States is in a recession. In an interview CNBC Mediagenic investor says inflation is higher than expected. Longevity has risen sharply due to supply chain disruptions and geopolitical risks.

Wood underestimates inflation

“We underestimated inflation,” it sounds. “It has taken me two years now to resolve the problems in the supply chain. Of course we do not see war coming in Ukraine. High inflation is a big problem and it is now putting us on the path to deflation.

Inflation rose in the United States in May Up to 8.6 percent, The highest level since 1981, forced the Federal Reserve to pull the handbrake. For example, US Federal Reserve Chairman Jerome Powell announced a rate hike after a recent interest rate meeting. 75 Basic Points Announced. This is three times more than the “traditional hikes”.

Economists warn that a sharp rise in interest rates could push the US economy into recession. After all, such an increase makes companies’ debt more expensive, putting pressure on their profit margins. When they see the skyscraper of staff and energy costs. Not surprisingly, many companies, including this one ZalandoHave sent a profit alert.

Is America already in recession?

But is there already a recession in the United States? The answer is simple: no. The recession is only talked about when the volume of gross domestic product (GDP) shrinks for two consecutive quarters. The U.S. economy contracted in the first quarter 1.4 percent, But not sure if it will be in the second quarter. James Bullard, chairman of the Federal Reserve Bank of St. Louis, expects the U.S. economy to grow in the coming months.

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2022 has been a very difficult year for Wood so far. The price of its primary fund, Arc Innovation ETF (ARKK), has fallen by more than 50 percent since the beginning of this year. These funds consist mainly of technology companies. Now that interest rates are rising they will be hit hard. Based on their market value At future profitsHigher interest rates undermine those gains.