• Thu. Feb 29th, 2024

Apollo Management’s Chief Economist Revises Outlook for US Economy: Soft Landing Unlikely Amid Economic Uncertainty

ByEditor

Feb 12, 2024
US Unlikely to Experience Soft Landing

Apollo Management’s chief economist, Torsten Sløk, has recently revised his stance on the likelihood of a soft landing for the US economy. According to Sløk, the outcome now has less than a 50% chance of occurring due to the delicate balance between easing financial conditions and the lingering effects of the Fed’s interest rate hikes.

Previously, Sløk had been optimistic about a soft landing, but new economic data has prompted him to shift his opinion. One significant factor behind this change is the improved financial conditions in the economy. Companies are issuing more high-yield and investment-grade bonds, and the IPO market is experiencing a resurgence. Additionally, mergers and acquisitions are on the rise. These developments have also contributed to a stronger job market, with January’s jobs report adding 353,000 jobs to the economy. However, despite these positive signs, the lagged effects of the Fed’s rate hikes are still slowing down consumers, firms, and bank lending. As a result, high interest rates continue to make borrowing money expensive.

With this new data in mind, Sløk believes that the economy is now teetering on a fragile equilibrium between these opposing forces. As such

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