6 July 2023
The economy “will soon be one of the biggest threats to equity prices.” US stocks could crash 25% as the Federal Reserve’s aggressive rate hikes may trigger a recession by year-end, warns FS Investments’ chief market strategist. The economy, previously not a concern, now poses a major threat to equity prices. Limited upside remains in the current rally, with potential downside of 20% to 25%. Higher borrowing costs and weakened job market could exacerbate the situation.