Renowned Investor Michael Burry Warns of Recession
- Blog
- September 28, 2022
Renowned Investor Michael Burry Warns of Recession
Inflation has impaired economies around the world. The macroeconomic situation will decline, as Michael Burry, investor, and Scion Capital founder, predicted. Burry became popular when he correctly anticipated and made profits from the collapse of the subprime mortgage market. He highlights the worsening situation in white-collar jobs.
According to him, the white-collar job market is going through a bubble bust, which might bring about a long-term fall in employment. Moreover, according to Burry, remote work will be accused of a decline in jobs in the future. The US Department of Labor will release the US initial unemployment claims on Thursday.
Inflation in the US is moving towards crisis levels. To ease rising prices, the Federal Reserve is using a hard line. The Fed raised interest rates to maintain price stability. They are also implementing quantitative tightening, with the company selling off assets from a financial sheet that rapidly grew during the outbreak. The August CPI report indicated higher inflation, and what followed was a hike by another 75 basis points by the Fed.
Experts predict a major increase of 100 basis points by the end of 2022. The Fed might turn more hawkish if the job situation continues to improve. In the current economy, jobless claims are also significant. The robustness of the job market has been used to alleviate recession concerns. However, a drop in the availability of white-collar jobs is usually a precursor to a recession.
