US recession would be much more likely without Fed rate cut: Macquarie By Investing.com

Investing.com — Without the Federal Reserve cutting interest rates, a U.S. recession would be much more likely, analysts at Macquarie warned in a note on Wednesday, pointing to growing signs of labor market weakness seen in the latest report on consumer confidence.

“We’re not saying a recession is coming, but in the absence of Fed rate cuts coming, a recession would be much more likely,” the analysts said, pointing to “worrying” signs of labor market weakness seen at the Consumer Conference Board. sentiment report released on Tuesday.

Respondents who reported that jobs were plentiful fell to 32.8 percent from 33.4 percent, while those who reported jobs were hard to come by increased to 16.4 percent. This “spread”, which closely tracks the unemployment rate, Macquarie says, is now the largest since March 2021, when unemployment was 6.1%.